Money is fungible (it's green no matter what you spend it on), so the general principle is to pursue a strategy that maximizes your overall return on investment. If that means investing in a college savings plan, you'll then need to spend less from current income to pay for college, freeing up money for retirement. And vice versa.

This yields a free key principles:

(1) Maximize the match. If your employer matches retirement plan contributions up to a limit, save to that limit. It's free money. Likewise, if your state allows you to deduct contributions to your college savings plan from your state income tax return, contribute up to that limit.

(2) Rank all savings vehicles and debt according to the after tax interest rate or return on investment, and direct any extra money to the highest rate. Paying off debt, after all, is like getting a tax-free return on investment equal to the interest rate. This can get tricky. For example, mortgage interest is deductible, but it only adds value to the extent that itemization is greater than the standard deduction. Student loan interest (for qualified education loans) is also deductible, but only up to $2,500 a year. However, that is an above-the-line deduction (technically, an exclusion from income), meaning that you can use it even if you stick with the standard deduction.

I discuss this in greater detail at FinAid in the section that discusses prioritizing savings.