DCF Income Payments and IRAs

DCF Income Payments can easily be purchased in qualified retirement accounts. Qualified funds may be in a Roth, a 401K, 403b, a Simple IRA, or other qualified vehicles. To buy a DCF Income Payment using qualified funds, purchasers use a self-directed IRA. Many self-directed IRA custodian options exist but only GoldStar Trust Company offers superior service, low costs, and a deep integration to the DCF Income Payment marketplace.

Rolling funds over from one custodian to a new one is a very simple process, but it can take a week or two. For clients who are planning to use qualified funds, it is often best to open the self-directed account first, even before you reserve a deal. Read on to understand more about DCF Income Payments and IRAs.

Self Directed IRAs: Set-Up, Transfers & Rollovers

Self-directed IRAs are needed when making investments in DCF Income Payments with qualified funds


There are three self-directed IRA custodians we work with. Provident, IRA Services, and GoldStar Trust all have familiarity with the asset class. However, Gold Star Trust is head and shoulders above the other two in terms of speed, service, and low cost. They are doing a great job for us and we recommend all our customers and advisors use them. Their paperwork will be shown in the video demo.

Download “GoldStar Trust IRA Documents” Shown In This Video


  • Open the GoldStar IRA Account– Complete and sign the application and pay account opening fee
    • Account establishment fee of $65 annual/$25 opening can be paid by credit card.
    • Page 5, Account Representative Form. Please sign where indicated with DCF Exchange as an authorized party. This authorizes us to communicate with GoldStar regarding your DCF Income Payment purchase, but does not grant any investment direction permissions.  You may also specify additional advisors on page 7.
  • Fund the GoldStar IRA- Page 6, IRA Transfer/Rollover Request
    • Depending on the current custodian and the investments held, transfer may take 2 days or 4 weeks.
    • Typically, we wait until the DCF Income Payment is court approved, then initiate transfer of funds to GoldStar.
  • Buy the DCF Income Payment-
    • The DCF Payment closing book will be emailed via Docusign with a Direction of Investment form included and ready for purchaser signature
    • Once the DOI is signed, GoldStar signs the Absolute Assignment and the Servicing Agreement as custodian, and funds the purchase of the DCF Income Payment
    • Closed/Funded/Complete


Self-directed IRAs are simply IRAs held by a custodian that permits you to direct your own investments- you can choose to buy DCF Income Payments, real estate, or any other sort of investment.  A self-directed IRA custodian will not offer you investment advice- they just ensure the account is in compliance with the IRS.

By contrast, many IRAs held by brokerages like Schwab or Fidelity let you pick from only a few Fidelity or Schwab mutual funds- they are restricted and captive and may offer traditional stock picking advice.


IRAs are designed to offer tax deferral for investors saving for retirement… and they are designed to be SPENT in retirement as well.  Most investors can’t touch the money in their IRAs for a long time, and too often, people shoot for income contracts in an IRA and produce income (and return of principal) that they can’t take out.  Instead, take advantage of these deferred interest rates and consider deferred lump sum cases.


Holding DCF Income Payments in a qualified vehicle requires the custodian to calculate the Required Minimum Distribution (RMD) each year. Our systems calculate the value of the remaining payments as of 12/31 of each year, and the IRA custodian uses this valuation for calculating RMD’s.  These calculations are shown on the last page of the Payments Table and Amortization Schedule, which is supplied with each payment stream closing book, and which is also available for download directly on the inventory page or from the calculator tab.

Be aware that lump sum and deferred DCF Income Payment contracts in qualified vehicles for investors over 70.5 years of age may be subject to RMDs yet not produce cash flow.  Advisors and customers should be sure there is sufficient money for RMDs when using deferred contracts in IRAs.

DCF Income Payments and IRA’s FAQ

Below are some frequently asked questions on DCF Income Payments and IRAs:

There are many self directed IRA custodians, but only a few are familiar with the DCF Income Payments.

Out clear favorite that we prefer above all others is  GoldStar Trust Company.  GoldStar is the trust-only branch of a  mid-sized Texas based bank and has a specialized niche in DCF Income Payments and secondary market annuities business.  GoldStar offers fantastic customer service and the lowest prices of any self directed IRA custodian, and is our preferred SDIRA partner.

To be fair, there are two other custodians we can work with for customers who already have accounts, namely IRAServices and Provident Trust Group.  Both understand DCF Income Payments, but GoldStar is a superior value and quality of service.

If you plan to use an IRA, you’ll need to open the GoldStar account first. Fill out and return to us, we’ll fill in your IRA documents for you and mail to you for your signature.

You do NOT need to fund your IRA to open the account, but as it sometimes takes time to open, and then again to transfer money, we prefer to have IRA buyers open their accounts prior to reserving deals to prevent delays.

Depending on the custodian, there may be fees for adding multiple DCF Income Payments to your IRA, but there are generally no fees for receiving funds from the insurance company into your IRA.

Now, depending on what you direct your custodian to do with your IRA funds in terms of distributions, you may incur fees, as outlined in their fee schedule.  That’s not something we control and is at your discretion.

Our preferred custodian, GoldStar, charges no additional fees to add multiple DCF Payment, and their distribution costs are minimal.

None of the money coming in to the IRA from a DCF Income Payment will be subject to withholding or taxation. The money you direct to come out of your IRA for distribution to you, however, would be taxable.  Those withdrawals are all up to you and your accountant.

That said, lottery DCF Payments ARE subject to withholding by the state lottery commission. Typical lottery winners have a $0 cost basis in their prize so all the income is taxable and taxes are withheld by the lottery commission in the state of issue for both state and federal. But as you bought the lottery payment, you DO have a cost basis.

In this case, Lottery payments purchased in your IRA will require your IRA to file for a refund in the State that issues the lottery.

While there are no fees to insurance companies, there may be minimal costs for payment servicing. Otherwise, DCF Income Payments are What You See Is What You Get.

IRA custodians have fees, as laid out in their fee schedules. How you choose determines the fees.

There are generally no costs associated with receiving a check into your IRA from a DCF Income Payment.  There may be some minimal costs for adding multiple IRAs, depending on your custodian. All custodians, however, have some costs for disbursements, and depending on your case and intentions, we can help determine which is best for you.

Now, depending on what you direct your custodian to do with your IRA funds in terms of distributions, you may incur fees, as outlined in their fee schedule.  That’s not something we control and is at your discretion.

Reach out to us if you’d like to:

  • Schedule a 1-on-1 video call to discuss your specific needs and situation
  • Ask questions about products, carriers, or DCF Income Payments
  • Discuss how a DCF Income Payments and newly-issued annuities may (or may not) fit into your portfolio

nathaniel pulsifer of dcf annuities

Nathaniel M. Pulsifer, Owner of DCF Annuities
(800) 246-1932 | [email protected] | Linkedin