Should I use a Roth or SEP IRA?

[adollaraday]

I am late to retirement investment party, but as they say it is better late than never. I have two jobs, one job I am an employee and there is no 401k program. The other job is one where I am self employed and I have no employees.

I have done some research which really attracts me to a Roth IRA over a traditional IRA or even individual 401k, but I can contribute more than the $5,500 max to my annual retirement account. I noticed the max for a SEP IRA is $51,000, if I were to qualify based on my income, which at this time I do not for that high of a limit, but I would qualify for over $5,500.

Can I contribute $5,500 to my Roth and then another $5k-$10k into a SEP IRA? Or can someone explain to me how that might work?

And is there any benefit to having a SEP IRA over an individual 401k?

[disneysteve]

Yes. Put $5,500 in your Roth and then whatever more you can into the SEP-IRA. That's exactly what I do.

The benefits of a SEP-IRA over a 401k are that you have unlimited investment choices with the SEP. With the 401k you are limited to whatever investment options the plan offers.