Financial woes are continuing to impact employees, with scores of workers dipping into their retirement accounts and many more worried about their expenses, savings and financial stress.

A new survey from Betterment at Work, a New York-based financial services firm, finds that employee financial health is on a downward trend, with 40 percent of employees rating themselves as financially stable, a 9 percent drop from last year.

Retirement accounts have also taken a hit: Three-quarters of employees (75 percent) say market volatility has impacted their retirement account balances, and more than a quarter (28 percent) dipped into their retirement savings to pay for short-term expenses this year, according to the report, which surveyed 1,000 full-time U.S. employees.

"This is a significant and worrisome number," said Kristen Carlisle, general manager at Betterment at Work. "Retirement savings should be tapped only in dire scenarios, and withdrawing before the age of 65 can incur steep financial penalties."

Inflation, unsurprisingly, is the primary culprit driving employees to tap into their post-work savings, with 64 percent of respondents saying they have faced higher costs of living and 88 percent saying inflation and rising costs of living have notably increased their financial anxiety this year. Carlisle added that there are several additional macro environment trends that have emerged in the wake of the pandemic that are contributing to financial issues for many...

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