I know that there is already a thread about making IRA contributions, but I thought I’d start this one because it is specifically about SEP-IRAs. Mods, my apologies if this is in the wrong place; please feel free to merge if needed.
I will be able to invest some money in a SEP-IRA this year (I am already maxing out my Roth IRA contribution). I would like to do this, but I am getting some conflicting advice about doing so.
Some have mentioned that a major drawback is that the money in a SEP-IRA only is only tax-deferred (like a traditional IRA). I will have to pay taxes on it when I take it out (at age 59 or so?) Therefore, these people have told me that there is no real benefit in starting a SEP plan; I would be better off taking that money and investing/using it now.
Does anyone have any thoughts on this? One possible benefit that I could think of is that if the money is in a SEP-IRA it is growing and compounding without tax being taken out, so you might end up with more money in the end because of this.
Thanks. The Roth IRA is the best deal, but I’d like to make use of the SEP if there are some benefits.