Technical SEO question regarding redirects; I appreciate any insights on best way to handle.

Situation: We're decommissioning several major content sections on a website, comprising ~18k webpages. This is a well established site (10+ years) and many of the pages within these sections have high-quality inbound links from .orgs and .edus.

Challenge: We're trying to determine the best place to redirect these 18k pages.

For user experience, we believe best option is the homepage, which has a statement about the changes to the site and links to the most important remaining sections of the site. It's also the most important page on site, so the bolster of 301 redirected links doesn't seem bad.

However, someone on our team is concerned that that many new redirected pages and links going to our homepage will trigger a negative SEO flag for the homepage, and recommends instead that they all go to our custom 404 page (which also includes links to important remaining sections).

What's the right approach here to preserve remaining SEO value of these soon-to-be-redirected pages without triggering Google penalties?