Transamerica Institute chief warns of a retirement ‘perfect storm’ as wealthy Americans miss the $2.6 million benchmark

Many Americans are feeling financial pressure, and even some of the wealthiest are not on track for retirement.

Affluent Americans now say they need $2.6 million to retire comfortably, a 26% increase from a year earlier, according to fresh HSBC research carried out by Ipsos among investors with at least $100,000 in investable assets. On average, however, they have saved only 52% of that target, and no generation is fully prepared. Baby boomers, the closest to retirement, have reached 74% of their goal, while millennials stand at just 42%.

According to a recent report from the nonprofit Transamerica Institute, concerns over Social Security’s future, stubborn inflation, competing financial demands, and the risk of job disruption are all making it harder for people to save for retirement.

“It is a perfect storm,” Catherine Collinson, CEO and president of Transamerica Institute, said in the report.

At the same time, retirement is becoming more costly just as the safety net for retirees looks weaker. A 65-year-old retiring this year is expected to spend an average of $185,500 on health care throughout retirement, a 7.5% increase year over year, according to a July Fidelity report. And with more than 4.1 million Americans turning 65 each year through 2027, according to the Alliance for Lifetime Income, more retirees are likely to depend on a Social Security retirement trust fund that is projected to be depleted by 2032.

This pressure is not limited to the United States. Longer lifespans and lower birth rates are straining pension systems globally, with the burden potentially shifting to younger generations.

“The higher the longevity, the more years the pension funds have to cover, and so that immediately comes in as an additional liability,” Sebastien Betermier, executive director at the International Centre for Pension Management, told CNBC in an interview published on Oct. 25.

“Think about the cost that it imposes actually on the next generation,” he continued. “It is a ticking time bomb.” The U.S. retirement system received a C+ in this year’s Marsh CFA Institute Global Pension Index, placing it 33rd out of 55 retirement income systems.

BlackRock CEO Larry Fink has been warning for years that the U.S. is heading toward a retirement crisis. In BlackRock’s survey, Americans said they would need about $2.1 million to retire comfortably, yet 62% said they had less than $150,000 saved.

“That’s a lot. More than I was expecting,” Fink wrote in his 2025 annual shareholders letter. “And almost no one is close.”

HSBC’s latest findings indicate the threshold is even higher for wealthy Americans, and many still fall short. Gen X, the group Fink said would face the retirement issue “harder and nastier,” has saved 55% of its target. Gen Z, at 45%, is only slightly ahead of millennials.

“A comfortable retirement is becoming more expensive, even for those who have substantial wealth,” Racquel Oden, HSBC’s U.S. head of international wealth and premier banking, said in the release.

Retirement is no longer the only savings goal

One reason is that affluent Americans are no longer saving for retirement alone. Seven in 10 respondents said they are planning for a life that does not follow a simple, linear path. Retirement remains the most common objective at 43%, but it is closely followed by personal or professional reinvention at 39%, including switching careers, starting a business, or taking a planned break.

Supporting children and aging parents ranks third at 37%, reflecting a growing financial burden for some households. As people live longer, more Americans are reaching retirement age while their parents still need care, and those expenses can quickly reduce a fixed income.

“When you’re retired, you’re basically living on a fixed income,” Rita Choula, senior director of caregiving with the AARP Public Policy Institute, previously told Fortune. “If you have not factored in an additional $7,000, $8,000, $9,000 a year for your fixed income, that can have a big impact.”

Longer lives are also changing what wealthy Americans expect to leave behind. HSBC found that 59% said living longer has already altered their legacy plans, and 31% said they are setting aside more for their own future needs, such as long-term care, even if that reduces what their heirs receive.

That change comes as many affluent parents are already uneasy about passing on their wealth. Fewer than half, or 47%, of Americans with at least $3 million in investable assets said they believe the next generation is ready to carry forward their family’s philanthropic causes, down from 55% in 2024, according to Bank of America Private Bank research.

Nearly half of HSBC respondents, 48%, said their main objective is for their children or grandchildren to become fully financially independent, even if the process is difficult.