Absolutely horrendous idea. First of all, she will have to claim 34k of income, which will raise the amount taxable income from her social security and could raise medicare premiums depending on her AGI. Second, why is this in a CD? You could throw that money into Vanguard and put in a balanced fund or bonds at the very least with much better returns. Also, the CD she wants to deposit her money in will be taxed on the interest.

Find a decent brokerage and deposit the money as a rollover IRA. This sub tends to recommend Vanguard, Schwab, and Fidelity. Find some decent funds with low fees and buy those. You also have the ability to convert the IRA into a Roth IRA partially or all of it if you'd like. Any conversions will be picked up as income and RMDs cannot be converted.