Most of the articles/blogs/websites on retirement savings concentrate on adding more savings and investments to increase the net worth of an individual. But a higher net worth doesn't imply that a person can be financially secure, unless he or she also has a dependable cash flow every year. So isn't building a yearly cash flow to cover all expenses more important than building net worth?
In the early years of saving for retirement you need to build net worth. Once you get closer to needing the money you will start focusing more on cash flow to be able to live off the savings you have accumulated. I think the answer depends on how close to retirement you are.
If you are talking about investing in general and not just retirement savings then I prefer to focus on a hybrid. Building net worth with part of my portfolio and generating cash flow with the rest.
Your focus on what your retirement portfolio does will shift as you age. If you are younger, then save a good deal and invest on high percent returns in higher risk categories because you have time to absorb losses.
As you get closer to retirement, shift your wealth to less risky but smaller returns.
My plans for cash flow are you invest now and have a big pile of cash in accounts to withdraw. My investments are in targeted life cycle funds where a fund manager adjusts the risks vs return for me. In my 2040 fund I am currently pretty risky, but in the year 2035, it will be pretty safe.
I won't need to rely on interest income*, hopefully my pile will be large enough that I can take from it like it was a regular savings account.
You can convert net worth to cash flow at any time by selling some assets. (Assuming we are talking about publicly traded stocks and bonds.)
High cash flow can be a red flag, that is, you can get in trouble "reaching for yield." Here's an elaboration on that: http://alephblog.com/2011/03/01/musings-on-yield/