Hello, 

I need an advise on how to better handle a mailbox owner when a user is no longer active (e.g. retired, resigned, etc.) Currently, these users have O365 Pro Plus G License and Exchange Plan 2G.  I was told that when a license is removed from any users, the retention period is only 30 days and after that, their mailbox is gone.  We would like to prevent that from happening.  We would like to at least keep their mailbox for sometime, in case there's a litigation, we still have their mailbox.  We also need to remove their license so that we can apply it to the new employees.  Please advise, thanks. 

Put the mailbox on litigation hold, then you can remove the license.  You'll have to use search to find anything in it, once it's past the 30-day retention period.

Hi,

As is well known, disabled and deleted mailboxes are retained in the mailbox database until the deleted mailbox retention period expires, which is 30 days by default. After the retention period expires, the mailbox is permanently deleted or purged.

https://technet.microsoft.com/en-us/library/dn186233(v=exchg.150).aspx

As I am not familiar with Office 365, I have no idea how to achieve your requirement.

This forum focuses on some general discussion about Exchange. So I suggest we can ask a question in office 365 forum for more help:

https://community.office365.com/en-us/f/

Thank you for your understanding.

Regards,

David