Financial Independence, Retire Early

Achieving FIRE (Financial Independence, Retire Early) has become a transformative goal for many millennials, Gen Z professionals, and even older investors looking to exit the traditional workforce early. One of the most accessible and consistent tools in this journey is mutual funds. Whether you reside in the United States or Canada, here’s a deep dive into the best strategies using mutual funds to accelerate your path to FIRE.


๐ŸŒŸ Why Mutual Funds for FIRE(Financial Independence, Retire Early)?

Mutual funds offer several advantages for FIRE:

  • Diversification across stocks, bonds, or other securities
  • Professional management
  • Automatic reinvestment of dividends and capital gains
  • Access to tax-advantaged accounts (IRA, RRSP, TFSA, etc.)
  • Dollar-cost averaging for consistent, low-stress investing

๐Ÿ‡บ๐Ÿ‡ธ FIRE Strategy in the U.S. Using Mutual Funds

1. Max Out Tax-Advantaged Accounts

  • 401(k): Invest in low-cost index mutual funds like those tracking the S&P 500 (e.g., Vanguard 500 Index Fund – VFIAX)
  • Roth IRA: For tax-free growth; ideal mutual funds include total market or growth-oriented funds
  • HSA (Health Savings Account): If eligible, invest for triple tax benefit

2. Focus on Low-Expense Index Funds

  • Avoid high-fee actively managed mutual funds unless they consistently outperform benchmarks.
  • Top Picks: Vanguard Total Stock Market Index Fund (VTSAX), Fidelity ZERO Total Market Index Fund (FZROX)

3. Use Target-Date Mutual Funds Wisely

  • Consider if you prefer a set-it-and-forget-it strategy.
  • Choose a fund with a target retirement date earlier than traditional retirement (e.g., Target 2035 instead of 2050).

4. Supplement With Taxable Accounts

  • Use tax-efficient mutual funds and ETFs in a brokerage account once tax-advantaged accounts are maxed.

๐Ÿ‡จ๐Ÿ‡ฆ FIRE Strategy in Canada Using Mutual Funds

1. Leverage TFSA & RRSP

  • TFSA (Tax-Free Savings Account): Great for long-term compound growth.
  • RRSP (Registered Retirement Savings Plan): Defer taxes until retirement.

2. Use All-In-One or Balanced Mutual Funds

  • e.g., Vanguard Growth ETF Portfolio (VGRO), iShares Balanced Growth CorePortfolio Fund
  • Provide equity/bond diversification with automatic rebalancing

3. Index Funds with Low MER (Management Expense Ratio)

  • RBC Index Funds, TD e-Series Funds (if sticking with mutual funds instead of ETFs)

4. Non-Registered Accounts for Overflow

  • When TFSA and RRSP limits are maxed, invest in tax-efficient funds outside registered accounts

๐Ÿ”น General FIRE Mutual Fund Tips for Both Countries

  • Reinvest dividends for compounding
  • Review fund fees annually
  • Avoid market timing
  • Automate monthly investments
  • Track FIRE number: Know your annual expenses and multiply by 25

๐Ÿ” Tools to Use


๐ŸŒ External Mutual Fund Screeners


โœจ Key Mutual Funds for FIRE (as of August 2025)

U.S.

  • VTSAX (Vanguard Total Stock Market Index Fund)
  • VFIAX (S&P 500 Index)
  • FZROX (Fidelity ZERO Total Market)

Canada

  • TD Canadian Index Fund – e Series
  • RBC Balanced Fund
  • Vanguard Balanced ETF Portfolio (VBAL) (Note: ETF structure, but similar to mutual funds)

๐Ÿ‡บ๐Ÿ‡ธ U.S. Mutual Funds

VTSAX โ€” Vanguard Total Stock Market Index Fund


VFIAX โ€” Vanguard 500 Index Fund (S&Pโ€ฏ500)


FZROX โ€” Fidelity ZERO Total Market Index


๐Ÿ‡จ๐Ÿ‡ฆ Canadian Funds / ETF

TD Canadian Index Fund โ€“ eโ€‘Series

  • Annual Returns (2025): ~+10.7% YTD; 2024: ~+21.0%; 2023: +10.8%; 2021: +24.9% ycharts.com

  • Comparison vs TSX 60: Slightly higher or on par with benchmark (~10โ€“20% vs index ~10โ€“21%) ycharts.com


RBC Balanced Fund (Select Balanced Portfolio, Series F / A)

  • 10-Year Annualized Return: ~6.5% (Series F) / ~6.9% (Series A)

  • 1-Year Return (2025): ~12.6%

  • 3-Year Return: ~10.1% Yahoo Financeca.finance.yahoo.com

  • Peer Performance: Outperformed category by 7.8% over 5 years and 14.1% over 10 years kiplinger.com

  • Structure: Multi-asset (Equity, Fixed Income) actively managed


VBAL โ€“ Vanguard Balanced ETF Portfolio (Canada)

  • YTD Return (2025): ~4.3%; 1-Year Return: ~13.3%; 3-Year Annualized: ~12.0%; 5-Year: ~7.9% Investopedia

  • Dividend Yield: ~2.3% with ~16% annual dividend growth over past few years digrin.com

  • Assets Under Management: ~CAD 3.6 billion

  • Expense Ratio: Very low for a balanced portfolio (~0.2โ€“0.25%) Yahoo Financevanguard.ca


๐Ÿ“Š Side-by-Side at a Glance

Fund / ETF Country YTD 2025 1โ€‘Yr Return 3โ€‘Yr Ann 5โ€‘Yr Ann Notes
VTSAX U.S. 6.3% ~17โ€“19% ~15.4% ~14.5% Broad U.S. equity, low fee
VFIAX (S&Pโ€ฏ500) U.S. ~6.8% ~18.2% ~16.2% ~15.3% Largeโ€‘cap focus
FZROX U.S. ~6.3% ~19.3% ~19.4% ~15.9% Zeroโ€“fee U.S. total market
TD Canadian Index Fund eโ€‘Series Canada ~10.7% ~21.0% โ€” โ€” Tracks TSX index closely
RBC Balanced Fund Canada ~4.8โ€“5% ~12.6% ~10.1% ~6.5% Equity + bond diversity
VBAL ETF Canada ~4.3% ~13.3% ~12.0% ~7.9% Passive balanced portfolio

๐Ÿ” Key Takeaways & Perspective


๐Ÿ“Œ Related Articles from Bloonser


๐Ÿ”น Final Thoughts

Mutual funds offer an efficient, hands-off way to build long-term wealth and achieve FIRE โ€” whether you’re in Toronto or Texas. With consistent investing, low-cost diversified holdings, and tax planning, mutual funds remain a strong pillar for anyone aiming to retire early.

Need a personalized FIRE plan using mutual funds? Stay tuned for the Bloonser FIRE Toolkit!

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