Thanks. I appreciate the info.
I'd love to hear from someone who does it the other way (takes the pre-tax and post-tax at the same time) and why. Just to get another take on this.
But I noticed I can't actually change the subject header on my thread, so maybe I need to start a new thread, asking about the "Mega Backdoor Roth". poop.
It's not clear if by "pretax" above you mean pretax contributions and/or gains, or gains on after-tax contributions. Let's assume the latter. (The prior doesn't make much sense for most people.)
Here's how I think it works:
1) You say you want to do an in-service withdrawal of your after-tax amount. You probably want to do the full amount, and you probably don't want to touch pretax contributions + gains. (As opposed to your aftertax contributions +gains.) You are forced to take after-tax gains along with after-tax contributions.
2) You now have a choice of whether that money (which is all after-tax contributions and possibly gains on after-tax contributions) goes all into your Roth IRA creating a tax event for any gains, or if you want to split it up so basis goes into the Roth IRA and any gains go into the traditional IRA, avoiding the tax event.
The main reason to put it all in Roth is to keep your traditional IRA space empty. This is advantageous if you also want to *also* do normal Roth backdoor conversions (with the $5.5k limit,) or might in future years. If you have any untaxed money in any traditional IRA, then normal Roth backdoor conversions are taxable events.
Otherwise, it's likely optimal to split it up so the pretax money lands in your traditional IRA and you avoid the tax event.
One fine point: you might consider opening *separate* IRA accounts for receiving money from your 401(k). The reason is that ERISA provides asset/bankruptcy protection to 401(k) money, which follows the money into IRAs. That isn't a perk for IRA contributions in all states, and if you comingle, how much is protected becomes ambiguous.