There's no way to avoid the ugly truth: Despite the recent rally, the market is still some 40% off its highs. And that probably means that your retirement funds have taken a substantial hit.

But that doesn't mean you can't recover them -- no matter what the market as a whole does next.

Start here
Simply put, the more you save to invest, the better off you'll be. And there are countless ways to do that.

You could downsize your home, for example, moving into a less expensive one and investing or living off the difference. You could up your contributions to your 401(k). You can save and invest more aggressively on your own.

But the most compelling one for me is this: work a few extra years.

Just add a few
Working a few more years helps you in several ways, all at once.

  • The extra years you work are years in which you're not living off your nest egg, meaning you end up with fewer years of retirement to pay for.
  • While you work, you'll keep enjoying benefits like health insurance -- expenses you can delay for a few years more.
  • The later you can delay taking Social Security, the larger each month's payout will be when you do start drawing it.
  • And perhaps most obviously: When you delay retirement, your nest egg will not only keep growing for a few more years but will also be boosted by further contributions from you.

Even three years of extra growth can make a big difference.

The table below shows the effects of 10% annual growth on different amounts of money over different spans of time.

Nest egg now...

10 Years

13 Years


$0.8 million

$1.0 million


$1.3 million

$1.7 million


$2.1 million

$2.8 million

Maybe the stock market isn't going to return 10% on average going forward. Maybe 13 years before retirement is unrealistic. Maybe you don't have $300,000 anymore.

But the point is this: The longer an investment has to compound, the better.

Growing your money
However long you have until retirement, you want the bulk of your money to be working for your retirement.

You can earn the market's average return simply by investing in a broad-market index fund, such as an S&P 500 one. It will immediately invest you in such blue-chip stalwarts as McDonald's (NYSE:MCD), Hewlett-Packard (NYSE:HPQ), and FedEx (NYSE:FDX).

But if you really want to recover your retirement -- and set yourself up for the retirement you dream of -- you probably want to look for outstanding individual investments that will outperform the market.

I recently screened for large-caps with four- or five-star ratings in our CAPS database (as a group, four- and five-star stocks have outperformed the market), with dividend yields topping 3% and 3-year average annual revenue growth rates of 10% or more. Here are some of the results:


CAPS stars

Dividend yield

3-yr rev. growth





Coca-Cola (NYSE:KO)




ConocoPhillips (NYSE:COP)




Nucor (NYSE:NUE)









While these aren't formal recommendations, they're worth a little extra research -- and they're the kind of stocks that can help you recover from this market meltdown.

The Foolish bottom line
Working a few extra years can give your retirement the one-two punch of more time to save and less time to draw down your savings. However you do it, though, if you want to recover your retirement, you need to save more and invest in strong prospects.

Our Motley Fool Rule Your Retirement service provides specific guidance on determining your retirement goal, asset allocation, investing for income, minimizing taxes, retiring as early as possible, and much more. If you'd like to see what they recommend -- including recommended mutual funds and stocks for your retirement -- just click here to get started.

Here's to a wonderful retirement!

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Longtime Fool contributor Selena Maranjian owns shares of Coca-Cola and McDonald's. FedEx is a Motley Fool Stock Advisor recommendation. Coca-Cola is an Inside Value and Income Investor selection. Garmin is a Global Gains pick. The Motley Fool is Fools writing for Fools.