The lack of planning occurs despite the fact 67 percent of respondents said they wouldn't be able to afford two years in a nursing home and 43 percent said they wouldn't be able to afford more than one year.

"It is a confusing scenario for consumers," said Dr. James Firman, NCOA president and CEO. "Most are concerned about long-term care, but a great many aren't even in the planning stages yet. This could lead to very difficult choices and dire consequences for many individuals and their families to face in later years."

The survey also showed respondents did not understand how to pay for long-term care, including the type of financing options. For example, 73 percent of the respondents incorrectly believe Medicare is the primary source for most older people's long-term care costs. The survey also showed that only 29 percent were familiar with reverse mortgages and 50 percent with long-term care insurance.

Many respondents were confused about the cost of long-term care insurance. Sixty-eight percent said they wouldn't be able to afford a policy but respondents' estimates of the cost were three to seven times higher than actual market rates. Forty percent were unable to furnish an estimate. In addition, 69 percent of respondents were not aware of new legislation which may provide them with tax deductions for long-term care insurance premiums.

In recent years, Americans have become more financially savvy, investing for a secure retirement. What was found is that they have not really investigated how to protect their nest egg from the potentially high cost of long-term care.