They use this information together with mortality rates according to actuarial tables to calculate interest rates on annuity products. Some actuaries work in the public sector and help federal and state governments evaluate changes in Social Security and Medicare benefits and regulate insurance rates. Actuaries can make life expectancy projections using historical data and individual factors, with the intention of maximizing consumers' retirement savings while reducing fiscal risk. By identifying uncertainties and predicting future results, actuaries help organizations avoid financial crises by avoiding overspending.
Most actuaries start out as apprentices in entry-level positions and gain experience gathering data and following an actuary mentor. The IRS also uses actuarial tables to calculate the exclusion rate for unqualified annuities for tax purposes. Actuaries use technology extensively, specifically modeling software, databases and spreadsheets, to develop their forecasts. Your annual contribution is determined by age, the amount of compensation, the return on investment, any actuarial assumptions and the maximum allowable benefit.
Participation outside the workplace ensures that actuaries stay up to date, create professional networks and continue to develop their skills. Actuaries use mathematics, statistics and financial theory to study the uncertainty of future events, especially those of concern to insurance and pension programs. Actuaries can earn up to two levels of certifications: associate and intern after passing a series of exams. Business risk actuaries identify fiscal, economic and geopolitical risks that may affect company objectives.
Pension actuaries also calculate the required amount of an employer's annual contribution to a defined benefit plan to ensure that participants have access to the plan's current and future benefits. Life insurance actuaries estimate life expectancy based on individual risk factors, such as age, sex and tobacco use.
