Most parents want to pay for their children?s college education, or at the very least help pay for college. While it would be great for your children to be able to start like after college without student loans to pay off, the cost to parents may be too high.

The average annual cost of a 4-year public college is $12,127 (source: The College Board?s Annual Survey of Colleges, 2005-2006), with 4-year private schools averaging $29,026 a year. College costs have been outpacing inflation by rising over 5% per year.

On the other hand, saving for retirement has become even more important as companies have started freezing or eliminating pension plans, and the future of Social Security continues to be uncertain.

Paying for both college and retirement will be challenging for most parents. Here are some suggestions to help you to achieve both goals:

? Have a plan. You should determine how much you will need for retirement and how much you anticipate your children will need for college. 

? Start saving as soon as possible. Time is your greatest ally, whatever your savings goal. Figure out how much you are able to save each month, and setup an automatic plan as soon as possible.

? Prioritize ? if you can?t afford to save for both goals, retirement should take priority over saving for college. Your children can always borrow for college or earn scholarships; you can not borrow money for retirement.

? Save for both. Ideally, you?d like to be able to save for both goals at the same time. If you?re able to, allocate money to both goals. You may wish to visit with a financial planner to determine how much should be allocated to each goal.

? Research ? there are several different types of college savings accounts available. Find out which type of account will benefit you the most before you invest.

? Use retirement accounts to save for retirement and college. Retirement accounts can be tapped into to help pay college bills (IRA withdrawals can be taken penalty free for college expenses; Roth IRA contributions can be taken penalty and tax-free). However, you should only do this if it will not sacrifice your retirement savings.

The bottom line to getting the most out of your savings - prioritize your savings goals, have a plan in place, and start early. 

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About the Author
Kristine A. McKinley, CFP, CPA, and founder of Beacon Financial Advisors, offers financial and tax planning on an hourly, fee-only basis. To sign up for free financial planning tips, worksheets, checklists and more, visit http://www.beacon-advisor.com.

If you're like many Americans, you face a variety of challenges every day. Most parents and some grandparents find themselves fighting a battle on two fronts: saving for retirement and college at the same time. This can be a tricky problem. Saving more money in one of the plans invariably leads to saving less in the other. Obviously you want to have enough savings to retire comfortably, but at the same time, to put your kids or grandkids through a quality college. 

So where do you draw the line between taking from one to give to the other? And how do you plan successfully to find a proper balance that benefits both you and your children? That problem is highlighted by the question of whether or not you should withdraw from an IRA to help pay for college tuition. The general consensus seems to be: not if you can help it.

Generally you want to have a successful enough college savings program that you don't have to worry about finding alternative sources of money for tuition. But with sky-rocketing credit hour prices and housing costs on the rise, it's a more difficult proposition than it was even a decade ago. 

But while prices have been increasing, so have opportunities to save. 529 Savings Accounts, Prepaid Savings Accounts, and Coverdell Accounts are just a few of the easy ways to save for college. 

One advantage of an IRA withdrawal is that the money can be used for any qualifying educational expense. But, the disadvantages are obvious. You're taking away from future retirement savings and you're reducing the amount of earning power you previously held. You're also faced with the fact that IRAs have contribution limits ($4000 a year) that can make it hard to restore your previous savings level. 

But that doesn't mean there aren't ways to catch up. Currently, for people over 50, the law allows you to make extra contributions of up to $500 a year, this is set to increase to $1000 a year in 2006. While this isn't much, it can at least help restore some of your withdrawal. However, just as college savings opportunities have increased, so have retirement savings opportunities. Part of a comprehensive retirement plan includes investing in various types of retirement plans, including 401(k)s and private savings. In addition, your entire retirement shouldn't be too heavily anchored in one savings vehicle, IRA or otherwise. 

No matter what you do, it's usually wise to seek input from a financial professional. Withdrawing from an IRA to pay for college has a lot of unseen consequences that can harm your retirement plan and make your golden years a bit more lean. One of your best bets is to plan carefully for college as soon as possible for your children or grandchildren so you're not forced to decide between retirement or college. 

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About the Author
Robert Valentine is a well-known expert in the matters concerning investors. His articles on financial planning matters that concern investors have been published by several publications throughout the United States. Please visit his website, http://www.themoneyalert.com to view his column.