In the last two decades of the 19th century, the quality of Alger's books deteriorated, and his boys' works became nothing more than reruns of the plots and themes of his past. The times had changed, boys expected more, and a streak of violence entered Alger's work. In The Young Bank Messenger, for example, a woman is throttled and threatened with deathan episode that would never have occurred in his earlier work.
He attended the theater and Harvard reunions, read literary magazines, and wrote a poem at Longfellow's death in 1892. His last novel for adults, The Disagreeable Woman, was published under the pseudonym Julian Starr. He took pleasure in the successes of the boys he had informally adopted over the years, retained his interest in reform, accepted speaking engagements, and read portions of Ragged Dick to boys' assemblies.
His popularityand incomedwindled in the 1890s. In 1896, he had what he called a "nervous breakdown"; he relocated permanently to his sister's home in South Natick, Massachusetts.
He suffered from bronchitis and asthma for two years. He died on July 18, 1899, at the home of his sister in Natick, Massachusetts. His death was barely noticed. He is buried in the family lot at Glenwood Cemetery, South Natick,_Massachusetts.
Before his death, Alger asked Edward Stratemeyer to complete his unfinished works. In 1901, Young Captain Jack was completed by Stratemeyer and promoted as Alger's last work. Alger once estimated that he earned only $100,000 between 1866 and 1896; at his death he had little money, leaving only small sums to family and friends. His literary work was bequeathed to his niece, to two boys he had casually adopted, and to his sister Olive Augusta, who destroyed his manuscripts and his letters, according to his wishes.
Alger's works received favorable comments and experienced a resurgence following his death. Until the advent of the Jazz Age in the 1920s, he sold about seventeen to twenty million volumes. In 1926, however, reader interest plummeted, and his major publisher ceased printing the books altogether. Surveys in 1932 and 1947 revealed very few children had read or even heard of Alger. The first Alger biography was a heavily fictionalized account published in 1928 by Herbert R. Mayes, who later admitted the work was a fraud.
Since 1947, the Horatio Alger Association of Distinguished Americans has bestowed an annual award on "outstanding individuals in our society who have succeeded in the face of adversity" and scholarships "to encourage young people to pursue their dreams with determination and perseverance".
In 1982 to mark his 150th birthday, the Children's Aid Society held a celebration. Helen M. Gray, the executive director of the Horatio Alger Association of Distinguished Americans, presented a selection of Alger's books to Philip Coltoff, the Children's Aid Society executive director.
A 1982 musical, Shine!, was based on Alger's work, particularly Ragged Dick and Silas Snobden's Office Boy.