Kotaku reports of Miyazaki's failing eyesight as the main reason for his retirement.
Yet, I'm not 100% sure if Hayao Miyazaki is going to retire from animation due to conflicting reports.
He 'retired' after the completion of "Princess Mononoke," but returned for "Spirited Away."

If you haven't seen Miyazaki's latest (last?) film "The Wind Rises"...I highly recommend that you do.
Unfortunately, this film is currently viewable in Los Angeles and New York City for one week only,
this week only for Oscar consideration purposes. (Original Japanese with English subtitles.)
The film is scheduled to have a wider release in February 2014 (English dubbing).

Saw it this weekend. Can't recommend it enough.
Trailer