You have just turned 39 years old, have just received your MBA, and have accepted your first job. Now you must decide how much money to put into your retirement plan. You are required to specify a fixed percentage of your salary that you want to contribute. Assume that your starting salary is $80,000 per year and it will grow 2% per year until you retire. Every dollar in the plan earns 7% per year. You cannot make withdrawals until you retire on your 66th birthday. After that point, you can make withdrawals as you see fit. You decide that you will plan to live to 90 and work until you turn 66. You estimate that to live comfortably in retirement, you will need $92,000 per year starting at the end of the first year of retirement and ending on your 90th birthday.

1. The amount that you will need in 27 years is what? (Round to the nearest cent.)

2. What percent of your salary must you put away each year?