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All of your IRAs are treated as if they were agglomerated into one big account. Any withdrawal from any IRA is partially untaxed according to the portion of the money you put in that was aftertax. You can't designate "I'm withdrawing only post-tax money".

This is true, but not to the point of CABob's question.

My related question is whether they MUST move with the pretax funds or can that amount be split out and handled differently? I can think of some circumstances where it might be desireable to keep the money separate.

When you leave your employer, you can choose to roll over some, all, or none of your 401K funds. If you do not roll over (i.e., if you withdraw) some or all of your pre-tax money, you will be subject to regular income tax, as well as a possible penalty (if you are <55 years old, not doing SEPP, etc.). If you do not roll over (i.e., if you withdraw) some or all of your after-tax money, there is no tax consequence--tax has already been paid.

So, there is no "must" involved--but one choice has consequences.

HTH
jtr
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