ACA
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There are two concepts that you need are addressing; namely, asset allocation and asset location. Asset allocation is an important factor for developing a successful retirement plan for both income and growth, if any. Asset location is focused on the taxes that one may incur based on taxable income.
It appears you are currently concerned with asset location and taxable income inasmuch as ACA subsidies and possible Roth Conversions are mentioned. I suspect that health insurance coverage via the ACA is important since you have mentioned early retirement at age 55. In this regard, your household size and Modified Adjustable Gross Income (MAGI) will determine if you qualify for a ACA subsidy.
In 2026, one must be under 4X under the Federal Poverty Level to receive an ACA subsidy. The amounts of subsidy will vary based on your MAGI and household size. For a single, the maximum amount is $62,000. It increases about $22,000 for each member of the household. So, for a household of four (4), the maximum amount is about $128,600. Lower incomes within each threshold receive greater amounts of subsidy. Each year, the MAGI thresholds are adjusted for inflation, if any. So, you can estimate the thresholds by guessing at what amount inflation may be.
Also, Roth Conversions are taxable income and may add to your MAGI household threshold(s). If the Roth Conversions are large, you may be ineligible for any ACA subsidies inasmuch as your MAGI may exceed the applicable amount for your household size.
Lastly, your asset allocation should reflect your whole portfolio. I have read many replies from other postings that do not count cash equivalents as a percentages of one's fixed income allocation. Also, if eligible for a defined benefit pension, that present value should be included in one's fixed income allocation. Although some folks may include SS Benefits as a percentage of one's fixed income allocation, I do not concur with that approach. We do not have any contractual rights to SS Benefits. In 1960, the Supreme Court (SC) ruled on that concept. In fact, the SC ruled that SS Benefits may be amended, changed, increased, decreased, and even terminated. SS Benefits are not a pension. Hope this helps.

In following with the Bogleheads path, does it make more sense to apply your chosen ratio of stocks/bonds to each account or across your whole portfolio with the mindset of putting all the VTI/VXUS in taxable and BND concentrated in tax advantaged so as to limit the amount of dividend income in your taxable so you can maximize your ACA subsidies and room for Roth Conversions?

Really depends on how much you need each year. You must have some level of income in order to be eligible for ACA subsidies, too little or too much and you won’t qualify for any ACA subsidies.

Thanks for this. Yes, we are planning on trying to qualify for ACA after 60, after exhausting COBRA. I'm confused though, wouldn't it make more sense to use roth IRA funds to pay for healthcare since they are not taxed on withdraw and would then lower my income and increase my potential ACA subsidy? What'd I miss here?

Not sure if you need to worry about Roth conversions. You may actually need to preserve some Traditional IRA funds to generate income from 60-65 if you are planning on utilizing ACA for healthcare.

It would help to better understand your context.
Right now you have about 35% in taxable brokerage. What kinds of accounts is the rest in?
If you retire with $3.5M how much will be in taxable brokerage? If a big chunk is in retirement accounts (Roth or traditional) then the dividends will not count towards MAGI until you withdraw it (which you can't generally do without penalties until age 59.5, although there are some exceptions/approaches that allow you to).
What's your overall plan? Will you be spending down your brokerage until 59.5? Or 65 (at which point you transition to Medicare, assuming no major legal/policy changes)?
What do you expect your basis to look like in your taxable brokerage, because as someone else commented capital gains count towards MAGI too.
Finally, what is your family makeup (I'm assuming single, but if married and both on ACA that changes where the subsidy cliff is) and and annual expected spending?
I'm thinking through some similar issues as we are hoping to early retire at end of 2030. We will need to draw some tax deferred (we have 457b accounts which makes this possible) and sell some equities from taxable brokerage to keep our MAGI low enough for ACA while also maintaining our lifestyle. We are resetting our basis over the next four years as we sell stocks an advisor had us in and move to VTI in our brokerage.
For emergencies (down markets and unexpected expenses) we will have a reserve of VUSXX, so drawing from that does not add to MAGI at all. We can also sell from brokerage at a loss in an extended downturn and then rebalance within our tax deferred accounts.
If really needed we can also withdraw Roth contributions, although that's a worst case scenario as we want that to grow long term.
Another approach I've considered is a high income year where we take out a lot (more than we need) and pay full price for ACA, and then have several low-MAGI years living off the excess from that early year.

Use those divs to stay out of Medicaid-land! $20k won’t be enough MAGI by itself for you to even be eligible for ACA. You just need switch from reinvestment to cashing out the dividends each quarter once you retire, and then use whatever other source to get your MAGI over 1.5x the poverty line.
Also — God only knows what the ACA rules will be in 10 years, or if it will even exist. So wait 8 years before worrying about this.

To put it more bluntly - the problem isn't that VTSAX produces too much in dividends. It's that basically any broad index fund will produce some - 1%-1.5% is low, and it's something you just have to deal with. This doesn't mean you did anything wrong investment wise, it's just the very annoying way the system currently works.
We really don't know what things will look like in ten years either - the ACA could be gone entirely or the subsidy cliff gradual fix reinstated, or a whole variety of other things. It's not something that's possible to 100% plan around. You're already doing the right thing by not holding dividend focused funds in your taxable - beyond that you just have to deal with whatever the limits and rules are when the time comes, and (personally) I plan to make sure I can always at least pay for unsubsidized health insurance. I don't want to get screwed because the rules change five years into my retirement.

I could live off that in one of the most expensive cities in America (Oakland, CA). Rent-controlled apartment and that level of income qualifies for the highest subsidized ACA tier. No car payments and keep overhead low.

> Due to my MAGI I’m cooked on ACA no matter what I do.
That line is $63,840 for an individual, or $86,560 for a family of two, and all the way up to $132k for a family of four. A lot of people think like what you said but are actually about to be under that somewhat easily. Remember, if you’re pulling from a brokerage, you get a lot more out than what counts toward the MAGI since you’re taking basis out too. And any Roth money pulled out doesn’t count towards it either. So it’s not unreasonable to have close to double the MAGI in annual expenses of you pull from the right sources.
> I know many others would be interested in filling the 12 or 22% bracket at the press of a button
If that person is planning to use the ACA, then that would be a bad move most of the time. If you’re able to be in the 12% bracket, then you can probably get subsidies. And the subsidies are worth way more than the tax savings of trying to fill up lower brackets with Roth conversions.

As mentioned, this really isn’t for everyone. But you make good points, I can research what would need to be added to account for such things.
Due to my MAGI I’m cooked on ACA no matter what I do. Similar to SS, whatever I end up getting once I qualify, it will be taxed at 85% and I have no way around it.
I know many others would be interested in filling the 12 or 22% bracket at the press of a button. Also a simple button to run up to Irmaa thresholds.

I don’t understand the point of this. The biggest factor in any of this planning when it comes down to it is going to be keeping your MAGI at a certain level for ACA subsidies if you use that for health insurance. This doesn’t deal with that at all. And you mention it doesn’t deal with many tax situations or social security income. No offense, but it seems completely useless to me.
Withdraw strategies almost entirely revolve around the tax planning aspect of it, and this entirely ignores that.