The financial pressure increases the closer a student gets to high school graduation and prepares to enter college. Since funding can come from only a few places it often creates a dilemma to choose from the right pot. Will the student qualify for scholarships? What possibility is there for a grant? Maybe we can induce the student to joint the military and let Uncle Sam foot the bill? How much college loan money can we get? Will the grandparents chip in? What athletic scholarships are available?

But, practically, most will need to dip into either their home equity, or their retirement account. A parent's first reaction is to provide for his or her child, so the child does not start out life burdened with debt, a very noble cause. In a perfect world, it would be wonderful to have sufficient savings to fund retirement fully and put money away for college. Often, however, a parent cannot afford to do both.

Experts estimate that an individual will need to replace approximately 65 percent to 75 percent of pre-retirement income to maintain his or her current standard of living. Lower-income earners may need up to 90 percent.

The first question is, how much confidence does the client have that Social Security will be there on retirement? And, will it provide sufficient funds to maintain his or her current standard of living? With more and more companies no longer providing pension plans, the burden of funding retirement is squarely on the retiree's shoulders.

The funding dilemma between college and retirement is one of the most difficult for a parent. Proper planning and long-term thinking should be involved when parents sit down to discuss the options, given their financial and personal circumstances and needs. The general consensus is that parents should not sacrifice retirement savings for college. Once funds are used to pay for college, they no longer can work and grow. Not fully funding retirement is a risky strategy that should be done only after consideration of the severe long-term consequences.

The Alma Mater Society develops college funding strategies that eliminate unsecured debt and allow for retirement while funding the college need.