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Saving enough money to help pay for your children's college education is a daunting challenge. Trying to save for your retirement at the same time? That makes a difficult task even more challenging.

Fortunately, there are ways in which parents can save not only for their children's college education, but also for their retirement at the same time. It requires starting early, planning for the future and making wise choices.

Moreover, when the decision comes down to whether it makes more sense to pay for your children's college years or fund your retirement? The choice should always come down to your retirement.

Saving on two fronts

College tuition and fees are not getting lower. According to College Board, the average cost for four years at a private college have soared to more than $170,000. Compared to private schools, state schools seem more affordable. In-state students can expect to pay about $75,000 in tuition and fees for four years at their state universities.

Saving for retirement, though, is also a financial challenge. Though there's no real consensus on how much you should save for retirement -- several factors, including where you live, what you plan to do and your health, will help to determine your need. However, it is a good rule of thumb to assume that you should save from 11 percent to 15 percent of the salary you've earned during a career of 40 years.

So how do you do both? How can you save for your children's college and your retirement at the same time?

Start early

The key is to start early. The sooner you start socking away money for both of these expenses, the better. Say your first child is in preschool. If you start putting away just $25 to $50 a month, you'll have a solid nest egg by the time this child is ready to go to college.

The same rule holds for saving for retirement. If your company offers a 401(k) plan, contribute the maximum amount with every paycheck, even if you are still in your early 20s. These savings will add up over the years.

You can also work with your children to find ways to make their college educations less expensive. Do your children have to go to a private college for all four years? Maybe they can spend two years at a local community college before transferring to a private university for their final two. Maybe your children can take extra classes during each semester to allow them to graduate early.

You can take the same approach with retirement. Maybe you can work a part-time job during your retirement to earn extra cash. Maybe you can downsize to a cheaper car or a smaller home to save money.

Retirement first

If you cannot save for both your retirement years and your children's college education, it is better to funnel your limited dollars to your retirement.

There are many reasons for this. Even if your children do have to use student loans to fund their college education, remember that student loan debt is far from the worst type of debt to have. Student loans come with low interest rates and tax breaks. Students can also sometimes delay paying these loans back.

However, if you do not have enough money for retirement? You cannot delay paying your bills in retirement, even if you do not have the cash available.

Remember, too, your children have the whole rest of their professional lives to pay off their student loan debt. You will be much more financially vulnerable if you reach retirement age without enough savings. What if you need to pay high medical bills? What if Social Security and your savings do not provide enough of a cushion to afford your car payments, groceries or utility bills?

Your first obligation as you get older is to prepare for your retirement. You want your retirement years to be enjoyable ones. You want the freedom to be able to travel, spend time with your grandchildren or take up a new hobby. You will not be able to do this if you've sent all your retirement dollars into your children's college education fund.

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