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Baseball contracts are fully guaranteed, so injured players whose career is functionally over but are still under contract don't usually retire, because that's one of the few conditions under which the team can get out of paying the remainder. But if the player sticks around like that, they still count on the team salary, which may force the team over MLB's soft salary cap and force them into paying penalties.
If he is retiring now, I am certain he came to some sort of understanding with the club. I'm sure he will be getting paid (maybe with a personal services contract), and the club can take the player contract off it's books for cap purposes.