I thought I understood the conversion ladder, but after doing some further reading, I am now confuzzled. Please correct me where I am wrong.
Hypothetical: Let's say I have $95k in a traditional IRA, from both traditional IRA contributions and 401k rollovers, and I want to build a conversion ladder for ants, aka $10k per year converted to a Roth until depleted and/or I hit age 59.5.
According to the pro rata rule, I'll be taxed on the full $95k the first year, then assuming no growth, $85k the next year, and so on? And not the $10k per annum I'm actually converting?
If true, I would need to convert $85k to either a solo 401k or to an employer 401k, then convert the remaining $10k in the tIRA funds to a Roth. But...then what do I do with that 401k? I'd still be stuck with an account that will have RMDs.
Where have I gone wrong in my assumptions?