My preference is that when investments do well, take that extra money and reinvest in income producing assets. The key is to have a steady stream of income so that one does not have to be adjusting spending up and down. You also don’t need to freak out when the stock market performs poorly. Sure, the price of my dividend producers has gone down recently, but my dividend income is steady. Of course, you need to choose the right companies, ones that are cash flow machines, because dividends can be reduced or even cut altogether. And that’s why other passive revenue streams should also be included in the portfolio.

You pointed out that as you progress in saving and investing for retirement to live beneath your means. That creates a habit that you take into retirement, allowing for a consistent lifestyle, even as markets gyrate up and down.