I wanted to address this separately. I overcome this issue by cash management.
We keep a pool of cash in our savings account. I target an amount equaling 3 years of our income shortfall plus an adder for inflation and those “items that seem to appear occasionally. (10% to 15% extra)” I also add extra cash when I have a large expense to pay, like building this house.
Good example: In 2020, our portfolio more than doubled and in late October, we decided to move and build a new house. I sold portions of every growth stock position. When found found this place and made an offer, I moved part of the cash in Dec 2020 to our savings account. It was enough to buy our building lot but I was able to get a mortgage on the land for about 1/2 of the purchase price quickly without a lot of forms, investigations, etc. A few bills were paid for design, gravel, water, electric and telephone plus some to do things around our old place for “sale appeal.” In Nov 2021, I got the first of 16 monthly bills from the contractor, so far. (Almost all were “pay on completion”. Some had 50% down like for the shower glass and the pavers for the patios and walks.)
All that cash came from our Roth IRA’s and stock we sold mostly in 2020 and some in late 2021. Note that those were basically peaks.
Since retiring in 2005, we have managed that 3 year cash cushion. When the markets are doing well, I may trim a little or just move some dividend cash to the cushion to top it off.
Right now, our last cushion top-off was Dec 2021. Our longest period was from July 2007 to Oct 2010 between sales of stock to replenish our cash cushion. I did take some dividend cash from our taxable account. (Our IRA’s were still behind the 59 1/2 barrier (I did not want to do a 72(t) or other shenanigans))
So, bad times, feed off the cash cushion. Good times, add cash back to the cash cushion.
No monthly sales, quarterly sales or even annual sales.
Managing a cash cushion is easy and it completely removes the pressure to sell during terrible market times.
Imagine trying to build a house over the past year by selling stock every month. Just think about it! Our house might have cost us double the amount by doing that. Do understand that our plan to move/build was based on finances not the other way around.
Based on what I know now and have learned about cash management, I believe if I were planning on retiring tomorrow with our portfolio down like it is now, I might still go ahead and do it.
That gets back to my previous note about knowing your expenses and income.
The more you know and understand how this works, the easier it will be for you in the future to make decisions about retiring and spending.
Does that help you?
All holdings and some statistics on my Fool profile page
https://discussion.fool.com/u/gdett2/activity (Click Expand)
PS: Here are some galleries of our project here.
General photos of the land and maps:
Construction: From bare grass on October 5, 2021 to current.