Best solution is to drop retirement, return to old grind system and money system, and drop plate.
I dunno...
Retirement as a concept is a good one I think. It allows people to respec (without letting them auto-correct a bad build - making mistakes and trying out new stuff is part of the fun of character design), and its got a certain RP quality about it - having an heir to your line and all that. It probably needs a few tweaks, and I'd like to see some other applications for it, not just as an alternative to level grind (maybe some functions in strategus). But generally the concept itself is quite fun and adds to the mod.
Also, I'd hate for plate to be removed. It isn't OP (due to speed penalties and upkeep costs), and the more items in cRPG the better. Some people like to occasionally dress as a gothic knight, so let them. And when strategus comes, I imagine it will have its tactical uses there.
At the moment, while its taking some time to perfect, I think the mod is moving toward a situation that properly balances RPG and grind. There are bound to be mistakes along the way as new stuff is tested and fixed, but slowly its getting better at allowing character customisation and leveling without forcing grinding and particularly abusable grind.
EDIT: though I totally agree about the equipment (the feeling that you treasure what you have because you earnt it etc - I just don't think it should be earnt through grind).