Justin Gelbman, CFP®, is a high-net-worth financial advisor and Managing Director – Investments at Oppenheimer & Co. Inc., where he is also a founding member of The Sharpe Group. Since 2005, Justin Gelbman has specialized in developing tailored financial strategies for affluent individuals, families, and executives, helping them navigate the complexities of long-term planning. His client-focused approach integrates comprehensive analysis with a deep understanding of each client’s goals, ensuring that wealth management strategies remain flexible, efficient, and aligned with life’s changing circumstances. Recognized among the Top 25 Regional BD Advisors Under 40 by OnWallStreet and honored by Forbes as a Best in State Wealth Advisor, Mr. Gelbman brings extensive experience in financial planning—including education funding. Drawing on this expertise, he helps families understand how to build smart and effective college savings plans that support educational goals without jeopardizing long-term financial health.
A Guide to Crafting Smart and Effective College Savings Plans
Saving for college can feel like staring at a mountain from its base—daunting, distant, and overwhelming. But like any big goal, it becomes manageable with a clear plan and consistent effort. The key to success lies in understanding the tools available and choosing the right combination to fit your family’s financial landscape. From 529 plans to Coverdell Education Savings Accounts and beyond, today’s families have more options than ever to make higher education attainable without sinking into debt.
A 529 plan is often the starting point for many families. Sponsored by states, these tax-advantaged accounts help cover education costs. Contributions grow tax-deferred, and withdrawals used for qualified expenses, such as tuition, books, and room and board, are tax-free. The beauty of the 529 plan lies in its flexibility. Account holders can use the funds at most accredited colleges and universities, as well as at some international schools. Many plans also allow up to $10,000 per year for K–12 tuition or to pay down student loans. For parents and grandparents alike, a 529 offers an efficient, hands-off way to invest for the future, often with automatic investment options and age-based portfolios that adjust risk as the beneficiary nears college age.
However, 529 plans differ. Because the states administer them, rules, fees, and tax incentives can vary widely. Some states offer deductions or credits for contributions made to their in-state plan, while others allow residents to invest in any state’s plan without losing benefits. Comparing options carefully—or consulting a financial advisor familiar with your state’s laws—can ensure families make the most of their savings opportunities.
Another valuable tool is the Coverdell Education Savings Account (ESA). While it shares similarities with a 529, the Coverdell offers broader investment choices, allowing you to pick from individual stocks, bonds, and mutual funds rather than sticking to a state’s limited plan options. Coverdells can cover K–12 expenses, from textbooks to tutoring, which makes them attractive to families planning for private or specialized schooling. However, they come with tighter restrictions: capping contributions at $2,000 per beneficiary per year, and income limits may prevent higher earners from contributing. For families who qualify, though, the ability to fine-tune investment strategies can be a powerful advantage.
Beyond these two primary vehicles, other approaches can play supporting roles. Custodial accounts under the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) allow adults to transfer assets to children for any purpose—including education. While these accounts lack the tax benefits of a 529 or ESA, they offer flexibility. The tradeoff is control. Once the child reaches the age of majority, the money becomes theirs to use as they wish. Still, for some families, they serve as a useful supplement to more structured college savings options.
No matter which route you choose, the foundation of an effective college savings plan is consistency. Starting early—even with small contributions—lets compound growth work in your favor. Setting up automatic monthly transfers, reviewing progress annually, and adjusting contributions as your financial situation changes can make a tremendous difference over time. It’s also worth revisiting investment choices periodically to ensure your portfolio remains aligned with your goals and risk tolerance.
Preparing for college doesn’t have to be a scramble when acceptance letters arrive. By combining tax-advantaged savings tools, disciplined investing, and a long-term perspective, families can transform what seems an impossible challenge into a manageable and achievable goal. With a thoughtful strategy, the dream of higher education can remain both financially and emotionally within reach.
About Justin Gelbman
Justin Gelbman, CFP®, is Managing Director – Investments at Oppenheimer & Co. Inc. and a founding member of The Sharpe Group. With nearly two decades of experience, he specializes in high-net-worth financial planning and develops holistic strategies for affluent individuals and families. A graduate of the University of Maryland, Mr. Gelbman has been recognized by Forbes and OnWallStreet for excellence in wealth management. Outside work, he enjoys golfing, triathlons, and volunteer service with West Windsor Fire Company #1.
