I like a multi-prong approach:

1. Have a sizeable investment in stocks - what you call "dormant capital" - enough to live on less than 3% of the principal per year.

2. Have enough invested in bonds to cover 5-6 years of expenses at our current spending level, adjusted for inflation.

3. Have enough in cash to cover 3 years of expenses, similarly adjusted for inflation.

4. Have rental income to supplement dividends.

5. Ease into retirement gradually over 5-6 years, retaining the ability to ramp back up if needed, and continue to do stuff I enjoy (like writing on Medium) that brings in additional cash.

6. Have a retirement budget that can be cut 40% before we start hurting.

7. Be able to sell properties once we no longer want to have the headache of being landlords (even with a property management company) and use the proceeds to (a) reduce our ongoing expenses by paying off the mortgage, (b) buy more stocks at depressed prices if the market is down, (c) put in bonds and cash if needed or desried, or (d) any combination of the above.

For me, FI means we can easily cover all our needs and a large number of wants while our net worth keeps growing in inflation-adjusted dollars, and do all this without having to work for money.