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I'm 31, and have just opened a SEP IRA, to which I intend to contribute the maximum amount possible *forever* on a monthly basis. I've got a little over 80% in a Total Stock Market Index and just under 20% in a couple of bond indexes, and intend to inch toward the bonds as I age. I've Read Bogle's books, and am convinced that this is the solution. I also have a Roth IRA in a strong Mid-cap Growth fund (so far).
The question is this: Am I wrong to forego putting at least 15% of my total SEP assets into a fund that will throw off lots of capital gains (like some kind of value index), or even an income-oriented fund, seeing as all of my appreciation is tax-free? Doesn't it seem like a fundamental advantage of the SEP plan: To use your tax-free growth to the hilt?
Or am I overanalyzing this? Any thoughts?
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SEPs are tax-deferred, not tax-free. You'll owe income tax on everything in your SEP when you withdraw money.

Invest in what will get you the best return after taxes. Since you're in a tax-deferred vehicle, you have the option of investing in funds that throw off lots of gains, but if those aren't the best investment choices for you, why bother? The SEP still gives you a tax deduction now.
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