These are dark days for would-be retirees -- otherwise known as all of us. 401(k) accounts, IRAs, regular brokerage accounts -- they're all feeling the pain of a stock market that lost 38% in 2008. In fact, back in October, Congress' top budget analyst reported that $2 trillion had been wiped out of retirement funds -- and the market only went down from there.

But just because the market has taken a chunk out of your retirement lately doesn't mean all is lost.

Take deep breaths ...
For one thing, assuming you're not planning on pulling all your money out of the market this year or next, most of your dollars will probably return over time. Stock markets crash, yes, but they've always recovered and gone on to reach new heights -- even if it took some time.

And if you're still in the working phase of your life, there's one important thing you can do to make a big difference to your portfolio -- and thus your retirement -- down the line.

More, more, more!
To get your portfolio back on track more quickly -- and to help it get ahead -- you should simply save and invest even more.

Does that sound counterintuitive? Just look at the numbers. If you began saving and investing in earnest at age 40 with a nest egglet of $25,000 and added $4,000 a year, by the time you're 65, you'll have accumulated $730,000, assuming the market's average return. But if you save $5,000 a year instead of $4,000, you'll have roughly $840,000.

Just an extra $25,000 invested over the course of your working life could make a $110,000 difference down the line.

But is that really meaningful? You bet it is. At a 4% withdrawal rate (the usual advice from retirement planners), $730,000 will net you $2,400 a month -- but $840,000 will net you $2,800 a month. Saving just $83 a month while you're working means a difference of $400 a month when you retire.

And despite the hit you've already taken, this is an excellent time to put more money in the market.

But, while saving an $83 dollars a month will make the biggest difference to your retirement, it's not the only thing you can do.

1. Maximize your 401(k)
Make sure that you're grabbing all of the matching dollars your employer offers. That's free money, after all, and it's another way to increase your annual saving and investing -- with little effort on your part.

2. Work a bit longer
If adding money to your portfolio now isn't likely to get you back where you want to be, consider working a few more years. Even working a mere two extra years can amount to hundreds of thousands of dollars -- just by giving your money longer to work.

3. Downsize your house
If you're feeling really pinched, a more aggressive tactic is to downsize your house. Yes, home values have been slumping, so you may earn less on the house you sell -- but the house you buy will also be cheaper, and a smaller house will enjoy a cheaper mortgage and less paid out in taxes. The money you save can be invested to support the retirement you dream of.

4. Improve your investments' performance
The rule of thumb is that, as we get closer to retirement, our portfolios should tilt more towards bonds and other fixed-income investments. But even as you enter retirement, you've got decades left to fund -- and so we need the power that only equities provide.

A simple index fund will get you the stock market's average gain, which has been 10% annually over the long haul, but a few smart investments in some individual stocks can help boost your overall returns.

Over the past decade, for example, steel company Nucor (NYSE:NUE) has averaged an annual return of about 18%, and its dividend has grown more than 10-fold in that period, too. Then there's Wal-Mart (NYSE:WMT). Its 4.1% average annual gain over the past decade might not look that impressive, but, in fact, this has been a tough decade. The overall stock market averaged a loss, so you'd have outperformed it by more than seven percentage points with a Wal-Mart investment.

So, how can you find stocks that will outperform the market going forward? Different investors have different criteria, but I suggest you begin by looking for the following:

  • Large-cap companies, because they'll be more established and familiar.
  • Sizable net profit margins (perhaps 8% or more), because that suggests brand or pricing power.
  • Past revenue growth of 8% or more, because you want a solid grower.
  • Companies trading near the low end of their historic average P/E ratios, because they stand a decent chance of being bargains.

Here are a few companies that currently meet those criteria and deserve further research:


Net Margin

5-Year Revenue Growth Average

Recent P/E

5-Year P/E Range

Cisco Systems (NASDAQ:CSCO)





Qualcomm (NASDAQ:QCOM)





TD Ameritrade (NASDAQ:AMTD)





Agrium (NYSE:AGU)











If by carefully choosing some individual stocks you average just 12% instead of 10%, it can make a big difference. Those 12% returns over 25 years will turn $20,000 into $340,000 -- instead of the $217,000 that 10% would provide.

So, look carefully at your portfolio to see where you might be able to boost your returns without sacrificing your overall investment strategy.

Get smart
Great retirements don't just happen -- they're carefully crafted through focused decision-making and investing. But it's the seemingly small things -- an extra $1,000 a year, an extra percentage point of returns -- that add up to a big payoff.

Our Rule Your Retirement service includes more tips and tricks for maximizing your retirement wealth -- including profiles of people who retired early and are willing to share their strategies. It also features many stock and fund recommendations. You can take a 30-day free trial just by clicking here.

Longtime Fool contributor Selena Maranjian owns shares of Wal-Mart. Wal-Mart is a Motley Fool Inside Value recommendation. Google is a Rule Breakers selection. The Motley Fool is Fools writing for Fools.