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What to sell when your financial needs change, stocks or bonds?
So I don't have any problems with your analysis or the comments associated with it. I just wanted to mention that no one is talking about taxes. Your answer....Figure out new portfolio breakdown and sell to 1.) Get money I need and 2.) re-balance the portfolio to my new target allocations is completely correct.  (Unimpeachable in my opinion.) However, when you calculate what you need to sell to meet your current cash needs make sure to include in that analysis money to pay taxes on anything you sell for a gain, or keep some invested to account for the tax money you would save by selling things for a loss.  The actual mechanics of calculating what these amounts are are fairly involved but not difficult to understand. (IE every situation is different.) Best of luck to you, and I hope your cashflow gets back up to its previous level soon.