This is backwards as far as taxes go. You want your equities in your taxable accounts where they are (a) tax-deferred, (b) you can deduct your losses, and (c) after the tax-deferal they are taxed at a low rate.. You want your CDs and other fixed income in your tax-advantaged accounts since otherwise all the income would be taxed yearly at your marginal income tax bracket.
Remember: money is money. It doesn't really matter whether it is in your taxable or tax-advantaged accounts except for how it is taxed.
If you are worried about too much money in stocks, then simply reduce your allocation to stocks, but try to keep your fixed income out of taxable accounts.
Under normal circumstances I'd agree with you, but in this market and the fear I am sensing in the OP. I think taxes are largely irrelevant.
My vanguard MM has a yield. of .71%. Even if the amount in the lump sum is substantial say $500K, total interest earned would be only $3,500 a year. it just doesn't matter that much if the income is taxed at 25-28% in regular account, or allowed to compound tax free in IRA and than latter taxed when the OP turns 70 1/2. Taxes are well under a $1,000 in any case and the difference between being taxed at capital gains vs ordinary income is only a few hundred dollars.. We don't know much about the OP situations, but in my case I have a plenty of tax losses going forward, so the incremental benefit of holding stocks in taxable account, just so I can sell them if they go down is minimal.
When I say riskier investment, I am not just talking about stocks. Corporate bonds, and possibly REITs I think are reasonable investments and would benefit from the more favorable tax being held in IRA. But their price certainly could drop a lot in the next couple of years.
I think the fundamental question Sarah needs to think about and answer are.
1. Why are you electing a lump sum instead of an annuity?
2. If you don't think you'll need the money, than why are you concerned about having it drop in value over a relatively short period of time like a few years.
3. What are you assets/income outside of this pension and how are the allocated.
There are lots of sound reasons for electing to take a lump sum distribution
instead of pension. But I think it is almost certainly a bad idea to take a lump sum, roll it over into an IRA, and the stick into a money market earning <1% and let stay there for many many years.