He retired at Sarah Dorsey's estate of Beauvoir

After serving his time in prison, Jefferson's health and the financial situation deteriorated. When the widowed American novelist and historian Sarah Dorsey heard about Davis' problems, she made an invitation for Davis to remain at Beauvoir, her house in Biloxi, Mississippi.

The remainder of his life was spent here, where Davis also published his biography "A Short History of the Confederate States of America" (1889) and the book "The Rise and Fall of the Confederate Government" (1881). Jefferson Davis passed away from severe bronchitis in New Orleans, Louisiana, on December 6, 1889, when he was 81 years old. He passed away while holding his wife Varina's hand in the presence of several of his friends.

Being one of the largest funerals ever held in the South, Jefferson Davis's remains were laid to rest in City Hall for several days while New Orleans was covered in black. An American flag was flown over the Confederate flag during the viewing, along with numerous other crossed American and Confederate flags, since the Executive Committee wanted to underscore his ties to the United States. Although initially buried in New Orleans at the Army of Northern Virginia tomb at Metairie Cemetery, Davis was reinterred in 1893 at Hollywood Cemetery in Richmond, Virginia, at the request of his widow.