Step 0: tl;dr
tl;dr of the tl;dr Most of us just have to create a Roth IRA account with Vanguard, and set up automatic purchases of a target retirement fund. This is so doable!
Here are the steps in more detail:
1. Open an investment account. Charles Schwab and Fidelity are good and feel free to use them. But I prefer Vanguard. (Detailed comparison here.) I don't use Wealthfront or other websites that pick investments for me. These websites can be effective too. Feel free to use them. But they cost more, so I prefer Vanguard. (Detailed comparison here.)
2. Make sure the account type is a Roth IRA.* A Roth IRA is a kind of Individual Retirement Account (IRA). Actually, for most people, it's the best kind with the best tax advantages. A Roth IRA can save you hundreds of thousands of dollars in taxes. (Detailed explanation of IRAs here.)
*Unless you make over $140k—in that case, you are ineligible to contribute to a Roth IRA. Make a traditional IRA account and/or consider a “backdoor Roth IRA”. More here.
3. You likely also have a 401(k) retirement account with the company you work for—figure out how to log in. This is a kind of retirement account you get from the company you work for. You might have 401(k) matching, where your company will match the amount you invest in your 401(k). We'll use this too. Details here.
4. Set aside 15-20% of your paycheck every month for investing.* If you can't set aside 15-20%, set aside as much as you can.
Important: Avoid the temptation to calculate the perfect monthly savings rate until you've set up your investment accounts and automated index fund purchases. (Details on calculating the perfect monthly savings rate here.)
*If you have debt with an interest rate (annual percentage rate or APR) that is higher than market returns (6+%) pay that down first.
5. Set up automated purchases of a Vanguard target retirement fund—an index fund that automatically transitions from growth investments to conservative investments as you get closer to retirement. Buy some amount of this fund every month and hold until retirement. That's all you have to do.
I—and many others—use target retirement funds for their blend of convenience and low fees. To get even lower fees, you could approximate a target retirement fund by maintaining your own set of index funds. This is less convenient, but also effective. One popular way of doing this is a three fund portfolio. Details on target retirement funds and three fund portfolios here.
Trust me and set an implementation intention
To double your chances of getting this done, complete something like the following sentence and speak it out loud:
“During the next week, I will spend 2-4 hours on investing on [DAY] at [TIME] in [PLACE].”
(This is what James Clear calls an implementation intention, and studies actually show this will double the chances of you getting this done.)
That’s it for the overview. Ready to keep going? Here's the next one: Step 1: What Index Funds To Use.