DS (3.75) sight reads (self-taught) at probably an 8 year old level now. He always knew the basic letter phonics but that was it. Because he can read fluently and has a huge vocab phonics/decoding is now developing as well (probably also because he wants to write/type the words). I wouldn't push phonics if your child is enjoying reading at present. IF he can't work a word out just tell him what it is, otherwise you can potentially slow down the fluency and make reading more frustrating. DS would just tuck that word away and read it in other contexts next time. Enjoy. The tricky part then comes with finding appropriate content...