Sooner or later every player in Dungeons & Dragons is going to end up taking a character as far as they can, or at least as far as they want to. Going up in levels is a time consuming process under even the most ideal of circumstances. Unless a character is near and dear to a player’s heart they may begin to get weary of the constant and seemingly never-ending slog to advance from one level to the next.
This is when players and the Game Master need to make some choices. Starting a new character is one option. Perhaps the player and Game Master can concoct a scenario wherein the character being retired passes on their more treasured belongings to this neophyte and thusly equipped they head out into the world. Or the new character might not be related in any way to the old one and they are determined to face whatever comes their way with whatever they happen to have on hand. There are any number of ways to handle this kind of transfer. The main thing that the new character will have that the old one acquired first is naturally going to be knowledge. Only the most adept of role-players can successfully separate out this sort of thing to prevent the character from knowing more than they should. In fact I have never seen it done. Try as hard as you like you are never going to forget some things that you learn even if you are playing an entirely different role.
The most difficult part of moving a player character into non-player character status is that the player no longer has a say in how that player acts, talks, and does business forever after. If the character had been an influential member of an adventuring party then there will always be an awkwardness when their old questing chums come a-calling and are not greeted in the same manner to which they have become accustomed. This change can be jarring. Whereas the players might have gathered at their favorite tavern pretty much every night, now they gather without this person. They might not even be able to interact with them at all. If the Game Master is particularly shy of assuming a player’s method of play and mannerisms the new NPC might well be as good as dead.
So that is a viable option. Death. Or some sort of mysterious disappearance. Perhaps it will lead to yet another quest. These sorts of things usually do. But that NPC will still be missing. The key here isn’t that the character isn’t amazing, hilarious, insightful, and valuable. The key is that what made that character all of those things was how they were played by the original player. Game Masters have enough to handle and deal with. The last thing they need to do is try and capture the essence of another sentient being and try to keep an NPC “alive” like a proper player would.
So with all that said, it should be obvious that under my auspices as a Game Master there is little hope that a retired character goes on to live a peaceful, uneventful, and long life after their player gets bored with them. Nope. That is basically a death sentence. A safer option is to put them on hiatus. Have them journey off someplace or become engaged in some kind of long-term endeavor that would justify them not being around and let them just do that while you focus on a new character or whatever it is you are wanting to do. If they need to be called upon for a specific activity then they can be made available to the player. Otherwise they are off the grid. It is just safer that way. As they say, moving on ain’t easy.