After watching their retirement funds get pummeled by the financial crisis at the same time the cost of college tuition continues to rise, many parents are faced with a difficult choice: contributing towards their childrens education or funding their retirement.

According to a recent study conducted by Allianz Life Insurance, one in four people are reducing or cutting off contributions toward their childrens college education. The study also reported that 25% of U.S. households are contributing less toward their childrens college education or have stopped altogether, while 44% of respondents have not started saving at all. Only 15% have cut back their spending on other things to keep saving/paying for their childrens college educations.

Jim Briggs, co-founder of ReducingCollegeCosts.com explains that families saving for college face a different reality than they did before 2008.

Most families that we deal with are now taking a really hard look at the cost of educating their children and trying to get that down to the lowest common denominator, he says. But when you get right down to it, given a finite amount of assets and income, its how do you take what the family has and maximize their return on those for both retirement and education.

So whats more important, parents retirement or childrens college? The answer, according to most experts, is retirement.

In a perfect world, youd like to move forward on two fronts, and while there are plenty of difficult decisions around investing a limited amount of money, this isnt one of them, says Michael Kiley, CEO of Security Benefit. When it comes to saving for your child's education or saving for your own retirement, you have to put the kids second.

Experts also advise parents to remember that there are loans available to fund collegethats not the case with retirement.

Jeff Rose, certified financial planner and author of the blog Good Financial Cents, explains that parents are often willing to sacrifice their future plans to avoid putting the burden of financial responsibility on their kids.

It's in my belief that eventually it'll all circle back around that they'll have to be dependent on their children, because they didnt have adequate retirement savings, he says.

Involve the whole family in the process. When deciding what schools to apply to, students and parents should make realistic, informed decisions together about what they can afford, says Briggs.

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Saving for Tuition vs. Retirement: Which is More Important?