What are the benefits of a SEP IRA?

Interest earned in a SEP IRA grows tax-deferred, which means dividends and investment earnings continue to grow without being taxed until you withdraw the assets. Withdrawals after age 59½ are taxed as ordinary income. Withdrawals prior to age 59½ may incur a 10 percent IRS penalty, as well as income taxes. At age 73 mandatory distributions are required.