PCs as contacts

So I was watching a newer TV show. This female character appears, she’s in danger, blah blah. I get it. You need to have clueless characters in the show so some more knowledgeable character can explain to the newbie, and therefore the audience, what’s going on.
Side track: I hate this on Criminal Minds. Love the show, hate when they imply that professional profilers need Reid to explain Jack the Ripper lore to them. I know it’s a trope and a tool, but too far a leap.
OK - So they get the newbie involved in a lifestyle that will be dangerous to her every week, but this woman with no understanding of the violence and horror of “adventuring” goes along. I hate that. Sure, she’s nice to look at, but that character should go running screaming into the night, not joining up! My question is - Should we allow PCs to do the same?

I admit, I haven’t done this. I’ve partially retired the characters of players who aren’t around anymore, but not active characters. I guess they never asked for it. But I am going to allow it going forward. Here’s how I want it to work:

Something happens in game to the PC. Maybe they are maimed or something happens role-playing wise (they lose a close friend, watch a child die, see their god’s angel turn on humanity, could be anything), and they decide that to be true to the character, he/she needs to retire. First off, what will that character do for a living? I would want them to have a chance of becoming involved again. Maybe they become a bar owner and the party hangs out there. Too common. I don’t think they should become a weapons or magic dealer - That seems too powerful.

So what have I done? Admittedly, one of the most useful retired PCs we ever had was a pimp. I didn’t come up with that; the player did. He did it to upset others in the party, but once the player was no longer around, his character became a pimp full time. He was useful; his girls heard things and could be used as distractions. That campaign is and was often focused on urban adventures, so it was probably more useful than it would be to those out dungeon exploring. What could be good? A land lord? The local lord’s tax collector? The local priest? Librarian at the city’s magical university? These are some ideas that could be useful, but are not key to every mission. One great benefit from this? You can give the now NPC experience/character points, so if they are ever needed back in the campaign they are not completely left behind. I usually allow half the experience that the slowest PC is getting - but you can decide what’s fair.

What about the player? I would give a same for same powered character - same level, number of character points or whatever you use. I would even give a magic item or two to keep them competitive in the game - not everything that the old PC had - not as many healing potions and little one shots, but a couple of the more majors. That way, the player is not materially affected for having done the right thing as a role-player.

If you have done or eventually do this - Please let me know how it went. I’m certain there are things to learn from good and bad results here!