President Trump has signed a spending bill that makes major changes to retirement plans. The new law is designed to provide more incentives to save for retirement, but it may require workers to rethink some of their planning.

The Setting Every Community Up for Retirement Enhancement (SECURE) Act changes the law surrounding retirement plans in several ways:

The biggest change eliminates stretch IRAs. Under the previous law, if you named anyone other than a spouse as the beneficiary of your IRA, the beneficiary could choose to take distributions over his or her lifetime and to pass what is left onto future generations (called the "stretch" option). The required minimum distributions were calculated based on the beneficiarys life expectancy. This allowed the money to grow tax-deferred over the course of the beneficiarys life and to be passed on to his or her own beneficiaries. The SECURE Act requires non-spouse beneficiaries of an IRA to withdraw all the money in the IRA within 10 years of the IRA holders death. In many cases, these withdrawals would take place during the beneficiarys highest tax years, meaning that the elimination of the stretch IRA is effectively a tax increase on many Americans. This provision will apply to those who inherit IRAs starting on January 1, 2020.