What the OP is suggesting was my original plan. However, I have temporarily deviated from it. At the time I retired, I had built up a sizable savings account with about 2 years of anticipated income. My plan was to take all my dividends in cash and use that first, then pull from the savings account as needed to meet my spending needs. However, my dividends actually ended up meeting almost all of my spending needs in year 1. So for year 2, I have turned dividend re-investment back on and am spending more from the savings account for now.
The primary reason I did this was that I wanted the dividends to buy back into the funds at these lower prices that we have due to Covid. But, the market has significantly recovered quickly (I'm not convinced it will stay recovered) and I'm not sure I'm actually going to get all that many shares at rock bottom prices. None-the-less, I'm going to stick with reinvestment for this year and just spend down my savings some. By January 1 of 2021, I probably will revert back to original plan and mostly live off dividends and possibly selling holdings for my spending needs.