Jack Nicholson should not retire. As long as he is still making movies and they are still making profits at the box office, I do not see why he should stop doing what he loves. He is obviously very good at acting and therefore should continue it until he can't.
While actors are generally thought of a young, our media production companies need actors of all ages. Most roles are created for younger actors, however, each film and TV show needs supporting cast as well. There is plenty of work for talented actors, such as Jack Nicholson, so there is no need for him to retire, unless he desires to do so.