Jonathan Guyton, CFP®, in a Journal of Financial Planning October 2011 article entitled Mirror, Mirror, on the Wall highlighted a survey that looked at income distribution strategies. He cites three:
(1) Structured Systematic Withdrawals - distributions from the total portfolio which is then rebalanced
(2) Time-Based Segmentation - basically a bucket approach where the low-risk (cash equivalents) are drawn down during markets when the equity portion has a low value (Mr. Guyton actually describes this system a little differently where the nearest-term horizon needs are taken from the lowest-risk pool).
(3) Essential-Versus-Discretionary Income - higher risk securities (stocks, for example) fund the discretionary desires and lower risk securities (cash/fixed income/annuities) fund the essential needs
#2, I prefer, because it provides a cushion to "...outlast most equity bear markets - most, but not all..." as Jonathan Guyton notes. There is a risk that the safe bucket gets exhausted though.
In his conclusion, he acknowledges that "...a thoughtful, policy-based rebalancing method would easily mitigate this risk..."