It means that he already has two kids, he is 40+ years old (5th decade of life) and he no longer works professionally. 'Dropped' isn't the right word. Retired is when you stop working professionally which allows you to focus on doing things that you enjoy.

Thank you, dear New Zealander resembled Robin Williams! Pension is a more clear word for me.

Technically retiring can mean worked long enough to get a pension. Some people in the army, used to be able to "retire" after 20 years. Collect a pension. There was nothing stopping them going and getting another job. . As Matt says, it normally means stopping work, as when people decide they have earned enough money, or are old enough (to get a pension?).