I think the only way to really incentivize folks without a lot of churn and burn on retiring characters is to have some sort of bonus upon retirement conferred on the next character created. So if I have a character that is 130 years old (shout out to Edvard Perfect II on EC), and retire them, my next character on EC should have some sort of bonus. I like the idea of some sort of unique item, but since those can be stolen or lost due to degredation, I don't know if that's the way we want to go. A boost to skills + h/p would probably be the best, fairest solution, with the idea that the older the previous character, the bigger the boost on the next character.
