IRA distribution

RMA kicking in? The amount will go up every year and he’ll get penalties if he doesn’t follow the rules. If he doesn’t need it pay the taxes on it and put it in a brokerage account or rainy day fund.

Couple of thoughts -

If he doesn’t need it he can have taxes withheld and put it into an individual/joint investment account for the future.

He can use it for gifting to family if so inclined (529s included)

If he donates to charities change the donations to being qualified charitable donations (QCD) from his IRA which count as part of his required minimum distribution and especially if uses the standard deduction provide a much bigger tax benefit. Any amount that’s QCD would now no longer be included in taxable income.

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If I were him, I would temporarily take the RMD distribution (amount after withholding taxes) and deposit it into a High Yield Savings Account (HYSA). Once the funds are available in the HYSA, I would use them to fund his Roth IRA. The current max amount he can contribute to a Roth IRA is $8000.00 since he is over 50 years old.

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He needs to have earned income to do this.

He can do a Roth conversion without earned income, but you ca t convert your RMD

Will they hold the taxes out before sending amount to him?

How would we know where he should put the $ without you giving any info about his financial situation, needs or desires?

Be aware the RMDs are going to increase every year as his life expectancy declines unless his account balance drops significantly. Thus, depending on his current and future tax situation it may be worth considering increased withdrawals or Roth conversions now. For instance, if he is in a low tax bracket now and married it might be sensible to withdraw extra to avoid widow trap when one spouse passes.
But you provided none of that context so who knows.

Sounds like they can accept some market risk and invest it in something like index ETFs. Taxable brokerage would be useful if they dont plan to spend it because heirs get stepped up basis upon death. Might also want to consider Roth conversions if they're not already in a high tax bracket (again so heirs and surviving spouse dont get hammered w higher tax rate then they'd pay today)

Likely want to look close at optimizing for surviving spouse, especially if pension continues after death. It's likely that wife out lives him and will find herself in higher single bracket as a widow with several income streams.

Might be crass to suggest reading "Die with Zero" to a 73 year old. But the concept that spending the $ now while he can see/enjoy the effect on himself and others is worth discussion. A relatively small $ now might make big impact for younger family members. Or encourage them to spend on their own desires while they still can enjoy and make lasting memories etc.

If they're super conservative at this point they take the RMD (they don't have a choice or they pay penalties) and move it to a HYSA. Or buy ETFs which would be my choice.