I would say, make sure that you are contributing enough at work for any kind of match that your employer offers. I am lucky in that I contribute 5% of my income to my 403(b) and the university matches with 10%, so that puts us at 15% of income from the get go. This money is tax advantaged, thus it reduces our overall income on our tax returns each year. But that means that we will pay taxes on it when we withdraw it after retirement. Our overall goal is to save 20% of income, since that will likely ensure enough money at retirement to maintain our standard of living, even if market returns are just mediocre over our careers. To get the extra 5%, I am contributing to a Roth IRA. This account is not tax advantaged, meaning that I am putting in money that I have already paid taxes on but that means that when I withdraw the money after retirement, I don't have to pay any taxes later. I think that in the long run, it will be good to have both types of accounts so that we can take advantage of the different benefits to help reduce our taxes later on in retirement. Starting this year, I am now capping my Roth IRA contributions ($5500 per year, since I am under 50).
DH will have been at his job for one year starting in September, so he will start getting the 10% income match for his 403(b) too. And before the end of the year, I would like to open a Roth IRA for him as well so that we can up our retirement savings to be a true 20% of our combined salaries.
As for the kid's college savings accounts, it is a good goal, but I would hold off contributing money towards those until you are putting away at least 10-15% of your income towards retirement savings first. This is especially important given that your DH is much closer to retirement than you are. I would definitely still open 529 accounts for each of your children and encourage family and friends to contribute to these accounts for your children's birthdays or holidays. This is exactly what I plan to do for our kids, since honestly, kids can only have so many toys and clothes, etc. You will need to do some research on your state's 529 account to make sure that it is a good plan. If your state plan isn't that great, you can always open a non-resident account for another state, which doesn't put any restrictions on how the money can be saved or used later. Michigan's plan is very highly rated and is administered by the well regarded company, TIAA, which is the same company that runs my 403(b). They offer good investment options with very low fees. It also will give us a state income tax reduction, which will be helpful. For those reasons, I plan to open DD's 529 account in Michigan. But if our state plan wasn't that great, I would have looked for a great plan in another state.
Check out this page to see your state's plan:
http://www.savingforcollege.com/529_plan_details/