(FORTUNE Magazine) – Vacations, kitchen renovations, fully loaded SUVs: Those are just a few of the things that compete fiercely with retirement savings for a share of our wallets. But for many of the VACATIONS, KITCHEN RENOVATIONS, fully loaded SUVs: These are just a few of the things that compete fiercely with retirement savings for a share of our wallets. But for many of the 47 million or so working Americans with children under the age of 18, the most daunting challenge of all is the prospect of their kids' entering college--more specifically, how they're going to pay for it without completely derailing their own retirement plans. Today the bill for a four-year degree at the average private school is around $112,000 for tuition, fees, and room and board (it's $49,000 in-state at a public college). If costs continue to grow at the current pace (and there's no reason to believe they won't), that tab will rise to about $227,000 by the time your newborn graduates.

As staggering as those numbers may be, at least we have a pretty good idea of what we're up against. The same cannot be said about retirement. Will we get downsized before our pension kicks in--if we'll have a pension at all? Will any vestige of Social Security remain? In the face of such uncertainties, denial often kicks in; studies show that most of us have not calculated how much we need to save in order to live comfortably in our later years. But it's impossible to make an intelligent tradeoff between saving for college and saving for retirement if you're armed with the facts about only one side of the equation.

Granted, no retirement projection is perfect. But a quick-and-dirty one is far better than none at all. Go to the online calculator at www.troweprice.com (one of the best). Let's say you're a 45-year-old earning $100,000 today and plan to retire at 65. According to the calculator, you'll need a nest egg of about $2.6 million from all sources (including a pension, if you have one) to live on 80% of your preretirement income to age 90, assuming an annual inflation rate and salary increases of 3% and an annual return of 6% on your savings in retirement.

Two. Point. Six. Million. (See "The Number.")

Now turn to the college-savings calculator at www.savingforcollege.com. Let's say you have a 10-year-old and you want to pay all four years of her college tuition. If costs continue to grow at their current rate, you'll need $153,000 for the average private college and $67,000 for a public one. And that's for just one child!

It may sound heartless. But numbers like those mean that most people should spend far less than they do for their kids' college and save far more for retirement. "There are loans for education, but nobody is going to come along and foot your retirement bill," points out Michael Greco, a financial planner with GCI Financial Group in Maplewood, N.J.

Okay. So what happens if you completely give your kid the shaft? If you gradually funnel the $153,000 you would have saved for your 10-year-old's private college into a retirement savings account such as a 401(k) and earn an average annual pre-retirement return of 8%, by the time you reach 65 those 12 extra years of tax-deferred compounding would give you $387,000 (see table). To put it another way, footing the entire bill for just that one kid's education will soak up about 15% of your required retirement savings. Footing the bill for three kids will absorb roughly half, depending on how old they are.

Take heart: This doesn't have to be an all-or-nothing proposition. If you contribute, say, a quarter of the total cost of a four-year private-school degree--still a sizable amount--you'd be looking at displacing a far-less-daunting 4% of your required retirement funds (see table). Alternatively, at that same retirement-tradeoff level, you could pay for more than half of your child's education at a state school. And let's not forget something that many of our parents knew: A little elbow grease never hurt anyone. If Junior has to take out some loans and get a part-time job, he's bound to appreciate his education that much more.

Consider the case of Stephen and Cecilia Strauss, ages 49 and 46, respectively. When FORTUNE first met the couple four years ago, Ceil was about to take a one-year leave of absence from her job as a hydrologist for the state of Minnesota to spend more time with their three children, now 13, 8, and 7. Steve, a product engineer at 3M in St. Paul (where he had worked since 1981), was mulling early retirement, perhaps as soon as age 55.

Both Steve and Ceil were lucky enough to earn good salaries (combined, they make about $160,000 today) and to have employers that offer generous defined-benefit pensions--the kind that provide a guaranteed monthly payment in retirement based on years of service and final pay. Combined, the pensions should replace more than 45% of their pre-retirement income. Still, they knew they'd have to save quite a bit more than the $360,000 they had already accumulated in their tax-deferred retirement-savings accounts. They wanted to meet all the costs for each of their three kids to attend the colleges of their choice, and they knew they'd have to save more than the $1,500 a year total they were earmarking for those educations. One more thing: The couple, devout Catholics, had a long-standing commitment to donate 10% of their pretax income to various charities, and they weren't willing to change that.

We hooked them up with a team of financial planners. Their verdict: Yes, the couple could realize their retirement goals and fully fund four years of college for all three children--if they did three things. Steve would have to keep contributing 10% of his annual salary to his 401(k) plan. Ceil would have to put 5% of her pay into her employer-provided defined-contribution plan each year when she returned to work. And they would have to ratchet up their college savings to a hefty $16,000 a year total. Given that they're not big spenders ("My midlife crisis was a loaded minivan," quips Steve), the couple figured they had at least a shot at making that happen.

That was the theory. Here's the reality. Ceil's leave from work cut the family's income by almost 40% for a year, forcing Steve to trim his 401(k) contributions to 6% of salary. Then the stock market collapsed. The couple decided that it was simply too hard to meet both the college-savings and retirement-savings targets the financial planners had set. So--after battling some guilt (especially for Steve, whose parents paid for most of his schooling)--they chose retirement. Since Ceil went back to work in 2001, they have been contributing the maximum allowed to their defined-contribution plans ($26,000 a year total) and their Roth IRAs ($3,000 each).

The Strausses did bump up their annual college savings, from $1,500 to $6,000 a year (which they put into Coverdell accounts; see box). But that's still well under the $16,000 the financial planners had recommended. They realize they won't have nearly enough to pay full freight if all three of their children happen to attend Harvard, for example. But they've come to terms with that. "We're trying to do as much as we can," says Steve. Their new goal is more modest: "not to burden them with a lot of debt." Ceil, who paid for most of her own college education via loans and part-time jobs, feels especially comfortable with their choice. Says she: "We don't intend to hand everything to them on a silver platter."