The Family Financial Trade-offs Survey from T. Rowe Price shows parents are willing to sacrifice their retirement savings to fund their children's college costs. Fifty-two percent said they would take on $25,000 or more in debt to pay for their kids' college education, 23 percent said they'd borrow $75,000 or more, and 9 percent said, "Whatever it takes."

"As parents, putting our kids' needs ahead of our own feels like the right thing to do. But just as we're told to put on our own oxygen mask first in a flight emergency, parents need to make sure their future is on track first," says Judith Ward, a senior financial planner for T. Rowe Price in Baltimore.

Because most haven't saved enough for either, setting priorities is a reality.

"If you bankrupt or underfund your nest egg, you may be hurting your kids more than helping," points out Paula Brancato, a financial adviser with Northwestern Mutual in Manhattan.

They may need to bail you out later, when you don't have enough money in retirement. "Unless the kids are willing to let mom and dad move in with them in the future, it's best to let the kids pay for or borrow their own way," says Mark Snyder, a financial adviser in Medford.

Unfortunately, says Michael Fleming, a wealth manager with Halliday Financial in Glen Head, "there is no silver bullet; a compromise should be reached to balance both objectives."

The best approach to navigating competing financial demands, says Brancato, is to educate yourself on all possible solutions.

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Next week: Alternatives for funding your child's college costs