AOR
iShares Core 60/40 Balanced Allocation ETF
stock NYSE ETF

I really like the methodology behind iShares AOA/AOM/AOR/AOK. Very "boglehead" and tax-friendly, in my opinion.
(And if you want a higher % allocation of bonds as you age, simply buy more bonds.)

Thoughts:
* Are you fully funding your own retirement? Setting your kid up for the future is great, but an even better gift would be for your kid to not worry about you being destitute and dependent on them when you're retired
* You can rollover $35K from a 529 into a Roth IRA, so you should consider doing some of that for your kid first.
* There's nothing magic about the S&P 500 (VOO/IVV/SPLG/etc.). It's done well over the last 15-ish years, but nobody knows whether it'll continue to outperform for the next decade. The decade before the current outperformance, it actually finished down.
* If you do decide to invest for your kid in conventional accounts, consider more diversified offerings like VT, a combination of VTI+VXUS or ITOT/IXUS, or an all-in-one target allocation fund like AOA. 10 years isn't that long, so you might want to do something more conservative like AOR or AOM.

Separate from the ETF advice, if you're actually planning to stop working, look into Rule 72(t), often called SEPP, regarding how to withdraw from your 401k without penalties before 59.5. If you only have $500K liquid and the rest is in your home equity and retirement accounts, I think you'll probably need to go this route.
As for whether or not you should focus on dividends or just selling, I think just selling is appropriate for most people, so long as you understand how to mitigate sequence of returns risk (either a cash buffer so you don't have to sell when your assets are down or the ability to greatly lower your expenses, so you don't have to sell as much).
As for which funds, it's going to depend on your risk profile and how adverse you are to your principal dropping. I would probably consider one of the following: VT, AOA, AOR, or AOM. All are globally diversified portfolios, the difference is how much is allocated to bonds. VT is 0%, AOA is 20%, AOR is 40%, and AOM is 60%. This results in VT being the most volatile and subject to the largest drawdowns while AOM is the least volatile and subject to smaller drawdowns. Though, on the flip side of that, VT is expected to have the highest long-term returns while AOM would have the lowest. So the choice is largely about balancing long-term growth against short-term volatility.

The large caps (especially US of late) will still pack a punch in market weighted broad index or even a global asset allocation ETF w/bonds, .. such as AOA or AOR. You can check those iShares holdings btw to see how small % these small cap index ETFs are in relation to the larger caps (vanguard just includes them in all-cap funds),
Think on the other side of the market cap spectrum getting too many small caps probably jusr results in “noise” at market cap. A typical small cap blasting off to record heights within an all-cap index is still a minor decimal. Now a factor portfolio (see below) where SC and/or SCV are at 10% is a different story .. if small caps rise.
Otoh, mid to small caps show when an economy is doing well (or not) as large cap multinationals more reflect global business. Then again, the larger caps tend to have a lot of cash flow on average.
If going with a factor portfolio (“slice and dice” various index ETFs out on their own), then over the long haul the small cap “blend” historically/theoretically returned more than large cap “blend”, value more than growth (especially small), non-U.S. more than US. Those could take some time to show up however.

Yes, that geography includes bonds... but really, the easy way to look at the exposure is to take a look at the underlying funds (FoF structure)... AOA just buys SP1500 (IVV + IJH + IJR) and IEMG + IDEV for stocks (IMHO could be IXUS, but that's Blackrock's call), trying to mimick a VT... then it balances it with bonds using IUSB + IAGG... AOR, AOM etc are the same thing, just a different % of stock/bond split

I wouldn’t over complicate it, most important thing is time in the market and getting started. Follow a 70/30 ETF model like AOR then add some thematics you like (AI, infrastructure) and alts like GLD and IBIT