The confidence older and younger Americans have in their ability to have a stable retirement has dropped significantly compared to one year ago. The only comparable drop on record occurred in the midst of the 2007-08 financial crisis, according to the 2023 Retirement Confidence Survey (RCS) published by the Employee Benefit Research Institute (EBRI).

“The confidence both workers and retirees have in their ability to finance their retirements dropped significantly in 2023,” said Craig Copeland, director of wealth benefits research at EBRI. “The last time a decline in confidence of this magnitude occurred was in 2008 during the global financial crisis. This shows that the current economic climate, in particular inflation, is eroding the confidence that Americans had in their retirement preparations going into the pandemic.”

Compared to the same survey in 2022, workers’ confidence in having enough money to comfortably retire dropped from 73% last year to 64% in 2023. For retirees, the figure dropped from 77% in 2022 to 73% in 2023.

In addition, just 18% of workers report feeling “very confident” in their retirement stability in 2023, while 27% of retirees report similar feelings.

“Among those who do not feel confident, 4 in 10 workers and a quarter of retirees state it is due to having little to no savings,” EBRI said. “Inflation also has a large impact on Americans’ certainty with 29% of workers and 42% of retirees stating this is the reason for their lack of confidence.”

Inflation is also impacting confidence for respondents across the board, with 84% of workers and 67% of retirees reporting fears that high levels of inflation will negatively impact their ability to save money for retirement.

In addition, workers’ debt levels have risen in the past year, and despite over 80% of respondents feeling confident in their levels of financial literacy, survey data indicates that debt problems are compounding.

“Significantly up this year compared with 2022, over 6 in 10 workers report their debt is a problem,” the survey states. “However, consistent with last year, 34% of retirees report the same.”

Retirement savings levels have also taken a hit over the past year, with 40% of workers and 58% of retirees reporting that their retirement account balances have dropped over the past 12 months.

“Workers worry that their salaries won’t keep up with inflation and report more debt, while retirees worry about cost of living and expenses,” said Lisa Greenwald, CEO of Greenwald Research, a firm that collaborated with EBRI on the deployment of the survey. “Half of retirees report that their overall spending is higher than expected, an increase over last year’s one-third, and the share of retirees who feel their retirement lifestyle is worse than they expected is slowly growing.”

The survey was conducted online from January 5 to February 3, and consisted of 2,537 respondents at or over the age of 25, including 1,320 workers and 1,217 retirees.