(Money magazine) -- I'm 46, self-employed and clueless about retirement. I can afford to put away $500 a month, but don't even know where to begin. I'd like to retire at 65, but wonder if that's even possible. Can you help? -- George, Alsip, Illinois

You're getting a late start here. Ideally, by the time you're in your mid-40s, you should already have savings equal to three to four times your annual income tucked away in retirement accounts, according to "Your Money Ratios" author Charles Farrell.

That figure assumes you'll want to retire at 65 on 70% to 80% of your pre-retirement income. It also assumes your savings will earn about four-and-a-half percentage points more than inflation each year, and that you'll continue to save 15% of income annually until age 65.

But let's just focus on what you need to do now. If you start saving now and stay diligent, you can improve your retirement prospects dramatically.

Many people in your position think picking the best investments is the key. Not so. Saving is much more crucial.

Get the ball rolling by putting that $500 a month you already know you can afford to save into an IRA account, which you can open at any mutual fund company or investment firm. Don't obsess about whether to go with a traditional IRA or a Roth IRA. If you prefer getting a tax deduction now, go with a traditional. If you'd rather forego the deduction today for the prospect of tax-free withdrawals in retirement, do the Roth. If you're unsure, do the traditional, as you can always convert to a Roth later.

Chances are you're eligible to contribute up to the maximum of $5,000 this year ($6,000 for people 50 and older), but you can check by clicking here.

To keep things simple, I suggest you invest your IRA stash in a target-date retirement fund. You just choose a fund with a date that corresponds to when you'd like to retire (2030 or 2035 in your case) and you get a ready-made portfolio that's appropriate for you now and becomes more conservative as you near retirement.

We highlight the target funds of Vanguard and T. Rowe Price on our MONEY 70 list of recommended funds, but both companies require a minimum initial investment of $1,000. You could open an IRA and invest in a target fund with Charles Schwab for as little as $100.

Once you've set up your IRA account and have savings flowing into it, you should start thinking about how you might improve on your planning for next year and beyond.

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