Toronto articling student Jake Hirsch-Allen says he’s thinking about investing in an RRSP, but doesn’t know much about them.

At 27, he has some money put away in stocks, but didn’t start thinking about retirement until his broker suggested that he have a registered retirement savings plan — a type of investment account with special tax advantages.

Eligible contributions to an RRSP can be used to reduce taxable income and investment income will be tax-free while it’s in the plan — although it will be taxed once the funds are withdrawn.

Despite it’s name, the money doesn’t have to be used for retirement and can be withdrawn at any age.

“Until now, I haven’t had the disposable income to warrant it. I’ve been working for human rights organizations and non-profits, not basically making any money until now,” Hirsch-Allen says.

He added that many other young Canadians just aren’t able to find permanent, stable jobs after graduation — limiting how much they could invest in an RRSP.

“A lot of people our age are still in debt … but I think that’s the minority. If I were to guess, it would be lack of knowledge and lack of money and lack of foresight,” Hirsch-Allen said.

Hirsch-Allen is part of a growing number of young Canadians who aren’t investing in RRSPs, either because they’re confused about the rules, don’t have the money, or choose to pay down debt or buy a home instead of worrying about retirement which could be 40 years away.

In a poll released Wednesday, 39% of Canadians between the ages of 18 and 34 said they have an RRSP. That’s the lowest level in almost a decade. It’s small in comparison to 2006, when 62% of those interviewed said they had an RRSP.

The annual survey by Royal Bank found that the majority of people in the age bracket are instead focusing on other goals like making regular loan repayments, or home ownership.

Lee Anne Davies, RBC’s head of retirement strategy, said young Canadians are avoiding RRSPs because they’re getting mixed messages. They hear the Bank of Canada warn about the perils of personal debt, and insist on paying it down before they save, but they then hear about the need to save and can’t decide between an RRSP or a tax free savings account.

“When we get people into that position of trying to make a decision, sometimes what we do is actually end up putting them into a point of inaction where they’re not making any decision at all, and I think that’s also what’s behind this,” she said, explaining that even putting $25 a month away for retirement can add up to a sizeable investment, if people start early.

The poll found 44% of people in the age group rank home ownership as their top priority, but only 6% of those who do have RRSPs are taking full advantage of tax-free RRSP withdrawals to help buy their first home.

RBC says the overall number of Canadian adults who have RRSPs jumped to 61% last year, up from 54% in 2009.

In addition, a quarter of Canadians with RRSPs plan to maximize their contribution for 2010 and 35% of all Canadians make regular weekly or bi-weekly contributions to their RRSPs.