Often, I hear words in conversation that I know, yet I am unable to recall. If someone else uses them, I know immediately, but I don't think I would be able to spontaneously insert into a sentence. Today it was "誤解", a mistake. A good word for me to know.
Studying Kanji too, I have become very familiar my memories capabilities. Memorizing is actually a pretty exact science. If I have a certain amount of words, I can fairly accurately determine how many days of study I need to remember them. That's just for test prep. I have to read the Kanji pretty regularly or I'll forget it.
I read everyday aloud now, which sometimes is an exercise in frustration, but it really helps. I just finished Winnie the Pooh (Kuma no puu-san), which I highly recommend, partly cause it's fun to read. Now I am starting The Little Prince. It's harder, I hope I can do it. There's a fine line between challenging yourself and wasting your time, I am learning. If I get through a chapter and re-read it a few times and have no idea what I just read, I try and find something easier.