Good point, Animorph! I got bit once by forgetting that I had reinvesting turned on and then took a tax loss on a fund. Oooops! What was disallowed was tiny, but it always makes the Schedule D more complicated.
I have found that even if I don't need all the distributions for annual withdrawal, I usually then them for rebalancing - that is, they would be directed to a different fund, so more tax efficient to let them accumulate in cash.
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!