Before Pizzaboy joins in and tells us to agree to disagree, I would like to say one thing. It´s unlikely that a 50 year old mafioso, who had just been caught selling drugs and therefore violated the no drug policy Bonanno passed in 1957 and 15 years later was back into the life, was retired. I think it´s more likely that the informant´s info (who I believe came from Harry Riccobene, the Philly mobster) meant that Lilo was shelved. But he chose to say "looks like he´s retired". I think that was his exact words. Why would he suggest that a fellow Mafia member who was basically in his prime, was retired? Of all the Mafia members around that time, did he pick out a random name and decided, without any substantiation that the guy was retired? The dude should have played the lottery!
I agree with you that it's very unlikely that Galante retired in 1962, but still you're only hypothesising. That FBI report only states that he was retired. You can interpret that any way you want.