(FORTUNE Magazine) – The numbers are so ludicrous, my husband and I have tried to ignore them for a few years now. At least $425,000 to send our 6-year-old and 7-month-old to a private four-year college. Perhaps $2.9 million to support us after we stop working. And with retirement just 20 or so years away, the situation seems more impossible with each passing day.

How did this happen? Like a lot of baby-boomers, we put off having kids until well into our 30s. Now that decision is coming back to haunt us as we face the daunting double whammy afflicting many of our peers: saving for our old age and the kids' education when the specter of both isn't far away. With a decent six-figure income and a 401(k) plan offering a 6% company match, we're not starting from scratch. But $3 million? Help! If you're one of the 46 million baby-boomers age 40 and over, our nightmare may well be yours.

Let's look at more numbers. Say you have just 11 years to go before Junior graduates from high school. (The largest group of kids born to baby-boomers was hatched in 1990, so this may be a good example for many of you.) With private-college expenses typically running $20,000 a year and education inflation at 5% to 6% a year, you're faced with a four-year bill of $166,000. And figure you want to retire at the generally accepted rate of 70% of your current income. If you make $150,000, you'll need $3.8 million, assuming you and your spouse are 40 years old and plan to live till you're 90. To reach both goals, the experts suggest you put aside on the order of $500 a month for each child, plus as much as 20% of your gross income, depending on how much you've already saved.

That's not going to happen in our family, I can assure you. We don't have that much to put aside. And it's unlikely you'll be able to save enough to fund all of your college and retirement goals at the same time. You'll probably wind up supplementing your retirement income with proceeds from the sale of a home or a part-time job at the 7-Eleven. But the good news is, there's still time to accumulate much of what you'll need--without eating Hamburger Helper every night.

While many experts figure that the inflation rate for tuition will remain high, others, like Melissa Levine, a financial planner in New York, think it may be lower--4% or so. Plus, you don't have to save for all of the college tuition. A more reasonable goal is 30% to 40% of the bill. You'll just have to cobble together the rest from an assortment of sources--summer jobs for the kids, for instance. And maybe you'll be earning more money, adjusted for inflation, a decade from now. "Even if you have to borrow or saddle the kids with tons of debt, you'll do it," says Watertown, Mass., financial planner and author Jonathan Pond.

The upshot: Worry more about retirement, and figure you'll somehow muddle through funding college. (FORTUNE to Ivy League-obsessed parents: You might also want to consider the strategy of Steven Lee and Karen Platt-Lee of San Diego. "We'll keep the college costs down," says Steven, by sending his three daughters to cheaper state schools.)

There are some fairly simple ways to get you going. First, a reality check. No article can provide information precisely tailored to your situation. That's where an accountant or personal financial planner fits in. You must also have attainable savings goals. The financial planners we talked to all acknowledged that in real life, you still need money for the mortgage, groceries, and tickets to Rent.

While these strategies differ in many respects, they all share the assumption that you'll try to maximize your 401(k) plan, especially if there's a company match. We're also assuming that you don't have parents who will help with the grandkids' tuition and that you're not a candidate for financial aid from colleges. (If you're lucky, you might get some aid if you have a couple of kids in private school at the same time.) We assume as well that you're a fairly conservative investor, content with annual returns of 8%. Finally, many experts suggest that you don't try to save on taxes by putting money in your child's name. There's no way to know whether today's 7-year-old will be, at 18, tomorrow's Lyle Menendez. Another disadvantage to those kiddie accounts is that financial aid officers include a good portion of your child's savings in determining how much you will have to pay. They don't if the same money is socked away in your retirement fund. Here are some other simple tips to balance college and retirement.

HOME IS WHERE THE CASH IS. A good place to start is your mortgage. Planners don't broadcast this strategy--there are big fees when you can talk your client into buying inverse floaters--but for conservative investors, aggressively prepaying your mortgage can save a big hunk of change. Also, the equity in your home doesn't count when applying for financial aid. One caveat: Planners say you get the most out of this strategy the longer you stay in your home.

Here's how it goes: Say you have 15 years to go till college and a 30-year, $200,000 mortgage at an 8% rate. If you add an extra $500 a month, you'll pay off the mortgage in about 14 years. You will also save $193,000 in interest. And you'll have created a $200,000 line of credit to tap when you're through, which you can use for either goal. Can't afford the $500? Try $200. You'll pay the debt off in 20 years and save $125,000 in interest.

Once you're finished with monthly mortgage payments, you can use that money to pay tuition or invest it to get further savings for retirement, says Gary Halbert, president of Pro Futures Capital Management in Austin, Texas. Say your monthly payment was $2,000. Assuming an 8% return, you can accumulate about $360,000 in ten years.

A SURE THING. Since your retirement is a long-term investment, it's hard to beat the stock market for maximum returns. But truth be told, many people like to know exactly what they'll have in hand when their kids graduate from high school--even if they might be leaving money on the table. There's a good primer on bonds elsewhere in this issue, so we'll pass on explaining the choices, which range from Treasuries to corporate bonds. Whatever the flavor, zero coupons are usually the bond of choice for tuition planning. You buy them at a deep discount and redeem them at face value. No messy questions about what they'll be worth. For $2,722, a 20-year zero will bring you $10,000 at maturity. Say your little one has 13 years before college. Buy a 13-year zero for $4,500 at a 6.4% yield; that will give you $10,000 in 2010. The next year, purchase a 12-year bond for $4,800; that, too, will grow to $10,000 at maturity.

As you get closer to graduation, each zero you buy will be a little more expensive; in the last year you'll pay $9,600. The final tally: $89,000 for a face amount of $130,000. For retirement you can use a similar approach. But you'll also have to invest in an equity growth fund if you want to build up enough savings.

One final word: Great as zeros are, you'll have to pay taxes on the bonds' imputed interest, even though you don't collect it until maturity.

MORE BANG. Okay, you're not a wimp. Here's how to juice up a college portfolio with stocks. Even if your child is as old as 7, you still have time to take some chances. Put 80% of your total portfolio in stocks, tempered by 20% in bonds. (You'll gradually change the ratio until it's 50-50 a year or so from graduation.) The equity portion would look like this: 40% in large-cap funds investing in companies with market capitalizations between $5 billion and $25 billion, 15% in small companies of less than $1 billion in market value, and 25% in international funds with a well-diversified group of mostly established overseas companies.

The idea here, says Peter Wall, director of investment management for Chase Investment Services Corp., is to reduce risk by including asset classes that don't closely correlate. When one is up, the others tend to be down. That's particularly true for U.S. and overseas funds. One caveat is that foreign markets are so pricey now--save for Japan--that they might drop in sympathy with a decline in U.S. markets (see "Can Stocks Still Rise?").

BEHIND THE EIGHT BALL. Finally, here's some advice if you've begun saving for retirement, as we have assumed, but haven't moved off the dime saving for college: Put all your college money into stocks.

Take a boomer couple--he's 42, she's 41--with two kids, ages 7 and 5, and an income of $150,000. They have $30,000 in her 401(k) and nothing saved for college. Assuming just an 8% rate of return, if they contribute a total of $15,000 to their 401(k) stock plans each year, they'll have about $1.4 million when they retire. For college, they'll put $318 a month into their portfolio and should wind up with $65,000 by the time their older child is ready to graduate from high school. Then they'll continue to grow that portfolio until they're finished with college. Result: enough to send both kids to school, although probably not very expensive ones.

And for the rest of us baby-boomers, it provides some hope. Who says you have to give up the golf vacation in Orlando?