1) Traditional for sure. They have a moderate marginal tax bracket today with a 70-90k income, but they will with near-100% certainty be retiring poor within just a few years in a very low tax bracket. The "good news" if it can be called that is a traditional IRA is now just as accessible to them as a Roth, but the bad news is they will be tempted to spend it on dumb shit. Also, RMDs will not be an issue, which is more sad than anything. Take the tax break now while there is still income to be taxed.
The financial planning goal should be to increase the odds that they retire at the social security full retirement age. They will be basically living off of social security and Medicare, so maximizing their benefit is the whole point of the meager savings they are putting together now. Imagine this scenario: In 2 years, your relative loses their job or becomes disabled. They could start withdrawing social security at the minimum age, but their benefit level would be too low to survive very well on. If they can just hold out on unemployment, savings, odd jobs, whatever for a couple more years, things look considerably better. Getting to age 67 would be the ultimate goal, and that's worth it even if they exhaust the last of their savings to make it to that point. I believe the ROI on waiting one more year to claim SS is around 9%. So basically you're accumulating a 2-5 year emergency fund.
2) Because it's hands-off, any brokerage will do. Do not let this be a reason to postpone saving for another couple of months. Look for any online brokerage that offers a bonus. I'd steer clear of advisors, because there's not enough money at stake to justify a fee-only advisor and because the last thing your relative needs is to be placed in a high-load, high-fee mutual fund.
3) Investment simplicity is a relative term. I think a portfolio of BIV, TIP, and VTI is simpler to understand than some expensive robo-advisor or lifecycle fund.
One last point:
After you have helped your relative set up the mechanics of saving and investing, you may ask if they'd like to talk about their long-term housing plans, opportunities to cut back spending, ways to increase income, etc. You don't want the relative to get the impression that because they're saving $500/month (only $30k in the next 5 years!) they'll be fine in retirement. Nope, we're only slightly mitigating severe poverty here. They need to be thinking in terms of downsizing or doing a reverse mortgage, moving to a LCOL area, getting rid of late-model cars, adopting radical Mustachianism / EarlyRetirementExtremism and other big decisions because investments are not likely to move the needle this late in the game. They need to be thinking about how to sock away more like $2500-$4000/month and making the radical changes that would enable such savings. Get the basics set up before offering this conversation, but then confront them with the math that says they're on track for roommates and ramen noodles in their 70's. Good luck.
