But it pays to take at least some of the doom and gloom with a grain of salt. Look harder and you'll see that many of the surveys showing millennials need help with saving or student debt were commissioned by financial companies selling — unsurprisingly — advice and loan refinancing.
"People always talk about 'kids these days,'" said Kansas City financial planner Cindy Richey. "But this generation has witnessed their parents' mistakes and seen what happens if you don't save enough for retirement. They might struggle at first, but I think they'll be able to create a better financial future."
Indeed, more young people today are investing in workplace retirement plans — with larger savings and greater stock allocations — compared with a decade ago. And millennials have more than just 401(k) plan auto-enrollment working in their favor; thanks to trends in the financial industry, investing to build long-term wealth has never been cheaper or easier.
Here are three big reasons to be bullish on millennial investors.
It's never been less expensive to own mutual funds and ETFs.
A new study by Morningstar found that the average fees investors pay to own U.S. funds have dropped by more than 10 basis points over the last 5 years. That's important because expenses can really add up: Over a 20-year period, a 1 percent annual fee could reduce a $100,000 portfolio by nearly $30,000.
The main reason investors seem to be paying less is that they are increasingly choosing passive funds, costing 0.18 percent on average, over active ones — which cost 0.78 percent. Millennial investors just starting out could benefit from this trend, since evidence keeps mounting that passive index funds perform better.
While workplace retirement plans are not all created equal, fund fees in larger 401(k) plans are below average, automated enrollment and escalation of contributions is increasingly common and target-date funds — which many plans offer — are an easy way to take on age-appropriate risk.
For millennials already funding the essentials (debt payments, emergency stash and retirement), using extra cash to buy individual shares of stock has also gotten cheaper.
"In days gone by, commissions were very substantial," said San Diego financial planner Tom Warschauer. "A trade of 100 shares of a $50 stock could cost about $250."
Based on trailing data going back to the 1920s, the Standard & Poor's 500 Index has returned about 7 percent each year after inflation.
There's no way to know how the market will behave going forward, but there's a strong case that millennials investing for the distant future will be just fine: While holding the S&P 500 for one month has historically resulted in a loss about 40 percent of the time, if you widen that period to 12 years, the likelihood of a loss drops to 4 percent.
To be fair, portfolio growth going forward may disappoint expectations. A new McKinsey report suggests average real returns in the years since 1985 have been exceptional; returns over the next 20 years could be as low as 4 percent, versus 6 to 8 percent in recent memory.
But millennials have one smart saving habit working in their favor: Socking away more and earlier. That's important, since doing the math shows returns can matter less than savings rate, because of the effect of compounding.
More training in schools and from parents has made young people increasingly aware of personal finance and investing, a new study has found.
About 70 percent of millennials said they received some investing education growing up, compared with about 60 percent of older Americans, according to a new Ipsos poll conducted on behalf of RBC Wealth Management and City National Bank.
Indeed, 45 states now include personal finance in their K–12 standards, more than double the number in 1998. And millennial teachers themselves are more likely than their older colleagues to believe financial education should be primarily taught in the classroom.
The conservatism of many millennials when it comes to taking on risk and new debt is in some ways a sign that they have learned from their parents' mistakes, Richey explains. But they shouldn't go overboard by loading up on bonds and ignoring the home-ownership opportunity that low interest rates afford, she said.
"The cost of owning a home over a long period of time is much less than renting," Richey said, "and mortgage rates today are something to think about. When we got 10 percent in the 1980s, we thought we were lucky."