The financial situation and obligations of each family differ; however, the difficulty of saving for one’s retirement and for the college education of one’s children is a similar struggle a majority of families today are faced with. Both college and retirement is a main concern for many households, but in today’s current recession, sometimes you need to prioritize your financial priorities! When money is tight, which savings pool can withstand taking a backseat: your future savings or your children’s?

A bill was recently introduced in Congress which would temporarily lift the 10% early withdrawal penalty for individuals facing financial hardship, noted planadviser.com. The bill, H.R. 2331, would waive the penalty on early withdrawals from qualified retirement plans for participants in two specific instances:

The Internal Revenue Service (IRS) has proposed rules that would allow financially-strapped businesses to reduce or suspend non-elective contributions to safe harbor 401(k) plans mid-year, according to planadviser.com. Under current rules, this can only be done through a plan amendment at the beginning of the plan year. The purpose of the proposed rules is to help businesses who otherwise might have had to eliminate their employee retirement plans.

A proposal that would’ve made automatic enrollment a legal requirement was not included in the 2010 federal budget, according to a recent article posted on the Workforce Management Web site. Automatic enrollment is a plan feature allowing an employer to automatically enroll employees once they are eligible to participate in their 401(k) plan.

Every day we see another news clip or read another article about how the economy is in chaos. The best way to survive a period of such financial turmoil is to form a plan and take action. A recent article from CNN Money.com offers some courses of action that will allow you to potentially save more, which can in turn be applied to your retirement savings.

When the stock market began to slide in the latter part of 2008 and into early 2009, many 401(k) participants moved their money from stocks into safer investments. Now that the market is starting to turn around, some might be wondering if the time is right to invest in stocks once again. That question was posed recently on CNNMoney.com.

With Democrats in control of both Congress and the White House, look for legislation to be introduced affecting 401(k) plans, according to an article in The Wall Street Journal.

Even with the current state of the economy and the demands on your financial resources, a recent article on CNN Money.com encourages you to save whatever you can. Some approaches and/or goals for saving are suggested, such as:

The federally approved suspension of Required Minimum Distributions (RMDs) for 2009 could allow you to benefit in a number of ways, one being tax related and another relating to investments, according to a recent article on Kiplinger.com.

In spite of the current economic climate, workers are still contributing to their 401(k) plans, according to a recent article in planadviser.com. The article noted that withdrawal rates and loan rates were in line with history. Although many participants have seen their accounts go down in the last year, they should regain those savings as long as they keep contributing, according to the article.