As discussed here, my dad (63) recently retired due to COVID and I'm helping him manage his retirement.
https://forum.mrmoneymustache.com/ask-a-mustachian/managing-parents-money-in-retirement/msg2527863/#msg2527863 His pension is currently covering his expenses. There's not a ton of room, but he has a savings account of about $30k to cover any shortfalls, and I'm a backstop as well. The plan is for him to add social security at age 66.6 (which will more than double his monthly income) and avoid drawing from his 401(k) for as long as possible, likely after my mom retires in 10 years (it's a Roth so RMDs aren't an issue).
My question is whether I should advise him to open an IRA and fund it to the max with $7,000 he currently has in cash. He has earned income this year from before he retired (and even if he didn't, my mom is working and they file jointly). Basically, it would move $7k from the "now/cash" bucket into the "later/invested" 401(k) bucket. Upsides would be getting more in the market, and tax savings. Downsides would be less liquidity, but if he needs more cash for an unexpected expense I could always cover it.