So the whole leveling system is going to be like c-rpg with the exception of starting as a peasant?
You start with a fully fleshed out but very generic build. As you level up you can specialize it point by point (e.g., remove 1 strength and add 1 agility instead).
Can you retire?
Do you gain an XP(or other) bonus from retiring?
Yes, don't know about bonuses yet.
How customizable are the weapons from retireing? Is there a limit if any kind?
For specialization (stats) probably up to 3 times. For customization (visuals) it depends on the item, some might have more options than others.