Good question - let’s break it down a little first.
A Roth IRA is a great option if you want to save $5,500 or less each year. That means you can save anywhere between $0 - $105 each week in these accounts. If you’re over 50 years old, the IRS lets you have a bonus, so these plans will allow you to save $6,500 each year (or up to $125 each week). The Roth is funded with post-tax contributions and benefits from tax-free growth, meaning you won’t pay taxes on your account gains each year. You're also able to withdraw your principal, penalty free, before age 59 1/2.
Would you rather pay income tax now and have withdrawals come out tax-free in retirement? The Roth IRA allows that.
Would you prefer to pay income tax on your contribution amount later, rather than now? The SEP IRA allows that
Now, a SEP has one big difference - If you have a great year in your business, you can save a lot more. You can contribute as much as 25% of your income, up to an annual limit of $53,000. Remember that the SEP is funded with pre-tax contributions. If you make withdrawals from a SEP before age 59 1/2, it will be taxed and there is a 10% early withdrawal penalty charged by the IRS.