I'm a German teacher in the US, so I can speak both from personal experience and from research.
From experience: I didn't get reasonably fluent until I lived in Germany. I went to a Goethe Institute in Radolfzell (am Bodensee) and then worked and lived in Stuttgart. A couple of anecdotes: While still in language school, I visited friends and drove an elderly lady to see one of her friends in the hospital. She talked the whole way there and back, and all I understood was "gell?" I had to guess at the appropriate response. A year later I took the same lady somewhere else; again she talked all the way, but this time I understood.
While in Stuttgart I lived with a family in which the father was a Schwab and the mother was Swiss from Zurich. After a little over a year, we were having dinner when the phone rang. One of the children answered the phone and reported back to Mom on what the caller wanted. A visiting local couple asked, "What was the phone call about?" I responded, "You mean you didn't understand that?" Everyone looked at me and said, "And you DID?!" Though I don't speak Schwyzerdutsch, I can understand it because I heard it. Which brings me to the conclusions
From research: Research into Second Language Acquisition indicates that the single most important element of learning a language is Comprehensible Input, that is receiving messages in the target language that you can understand. But that doesn't mean simply learning a list of vocabulary. Brain-based research indicates that the brain memorizes in "chunks" that contain meaning. So, you need to be getting communication input that you understand and that is meaningful. The messages should be both aural and visual, i.e. heard and read.
So, my advice is: listen to as much understandable German as you can (TV, film, songs, podcasts, etc) and read, read, read!
Hope this helps.