TL;DR: Where to invest a retirement stash that is currently in cash when retirement is <4 years away?
Background:
My dad is coming up on traditional retirement age and has asked me to take over management of his financial life because managing his money has always been a source of anxiety for him, and he wants to, as he puts it, “enjoy his retirement by acting like a carefree ten-year-old.” Basically, he wants a monthly cash allowance and to never have to think about his money again. I am happy to do this, and because we have a really good relationship and I trust that he trusts me to handle it completely, I’m not worried about it from a family relationship perspective.
He plans to work until 66.5 (in less than four years; he is about to turn 63), even though he could retire now by my calculations, because he feels a sense of responsibility to leave my mom with the maximum widow’s SS benefit assuming she outlives him. This seems silly to me, but it is what it is and I doubt I’ll be able to talk him out of it. For various reasons, he and my mom run their financial lives separately; he covers the majority of household expenses from his income and funds retirement, and her earnings are essentially for her discretionary spending. Again, not going to even try to talk them out of this because it seems to work for them. Therefore, the numbers below reflect only his income, savings, and spending on what are "his" expenses.
He is naturally very mustachian - he doesn't have a car (he walks, takes public transportation, bums rides from my brother, and hitchhikes(!) to get around). When he retires and doesn't have to have a cell phone anymore, he wants to switch to a dumb phone and put as few minutes on it as possible and leaving it at home as often as possible. He wears clothes and shoes until they are literally held together by duct tape, and walks around the neighborhood taking everybody's old kitchen scraps to feed his chickens for free, etc. So, his spending is pretty dialed in already.
In his savings to date, he has been risk averse - his investment strategy has been to not lose any money, which he has done, rather than to maximize gains. He has done this by whenever the S&P 500 hits a record high, he pulls out all of his money and puts it in a money market account and only buys again when it's substantially less than what he sold for. This means he bought a lot in 2008, but then 2-3 years ago when the market hit a high he put it in a money market account. Because the market kept climbing and hasn't been back to that point, he's been in essentially cash ever since, including new money he contributes every paycheck. As I take over, this seems to clearly be the thing we need to fix. If it were me, with decades and decades to let my money sit, I would put it all in VTSAX (although it would pain me a little bit to do it all at the time we are again at a record high). With him, I think he needs a somewhat more conservative allocation, but I'm not sure quite what, and am not quite sure how to spread that out - dollar cost averaging or lump sum? At the very least, his new money should be invested.
Numbers:
[This isn't a case study because his spending is pretty low already and he isn't asking for help on trimming fat. I did use the Case Study spreadsheet to come up with the numbers below]
Annual spending: $28,441 (this used to be higher, which is why his retirement savings aren't higher, because all of us kids are gradually phasing into adult independence; my youngest sister is really the only one who is still being supported, and she's in college).
Roth 401(k): $236,782.35 in a money market fund
Expected Annual Pension Payment: $31,560
Expected Annual Social Security Payment: $24,612
Crucially, social security and pension alone more than cover his annual expenses - he'll probably continue saving after retirement. This makes the problem of what to do with his 401(k) a little less urgent, since it's technically just gravy. Even so, it seems crazy to just let it sit in cash for the rest of his life. Realistically, it will probably be used to cover my mom's "discretionary spending" after she retires in 10 years and stops funding that herself from her paychecks, and any household emergencies. He's also very generous and would like the flexibility to help out my siblings financially if they get into a bind (for example, he gave my deadbeat brother a car loan a couple years ago).
Where would you put the 401(k) money?