Daria is 30 years old and is already thinking about saving for retirement after she learned about the wonders of time value of money and compounding. She is a Manager for a large construction company and earns $65,000 per annum gross. She expects to receive a raise in line with inflation annually at rate of 2% for the next 5 years. After this she will receive a promotion with a pay raise of 30%. Thereafter, her salary will continue to rise with inflation of 2% per annum until retirement. She will save 5% of her salary for the first 5 years, then increase the savings to 10% for the next 15 years and finally 20% until the year of retirement since her mortgage will be paid off at this point in time. All of her savings will be put into an RRSP account as they are able to compound tax free. Her investment advisor indicated that she will earn a return of 5% per annum before-tax. All savings are at the end of the year.

1. How much will she have saved at age 55?
2. If she retires at age 60 she will need to save $800,000 total before tax to live the way she would like to during retirement. How much more does she need to save each year from age 55, in addition to the 20% of her salary already to retire at age 60 assuming that the additional savings is in an ordinary annuity?