I don't retire units, even vanilla archers when I have fully developed longbowmen available, BUT I do pick a province and drop all beaten/damaged units in it (I only field units at full strength with very few exceptions) and combine units as they are damaged mixxing higher valour units only with other higher valour units. Sometimes a unit will sit out for extended periods, but I can't stand not using a unit. Another thing I do is garrison castles with old units if it's clear I'm not going to use them again. That said, many of my old units are proving particullarly effective in extended desert warfare now that I left the eggys till the end game. Hobilars, mounted sergants, steppe cavalry and clansmen without the armour upgrades are remarkably effective in desert warfare.

This retraining feature is great though and gives many older units a second life if you're done in the desert.