Alex is a non-traditional student, returning to study at Reedley College in the Information Technology Program. Upon completion of the program, he knows he can get a job, starting at $55,000 a year as he already have some work experiences. He also has a side job where he makes additional $20,000. So, his combined income is a total of $75,000. As he is 40 years old and has not saved any money for the retirement, he is thinking of saving money for his future. He figured out there is an investment, where he can earn 10% return, if he starts saving now. He would like to save at least $500,000 at age 60, which is 20 years from now. Please tell him approximately how much he will need to save to reach his goal, explain the time value of money, and how much he will need to start saving yearly, applying the time value of money (compounding interest).