R.,
I'm sure you didn't mean to make light of retiring from the military, but it kind of sounds that way when you say "he is not retiring from working, just the military".
It is a big deal, especially if he has had a long military career. Many people retire and still work, but think of it more as a significant milestone in someone's life.
Anyway, you should get a retirement gift, but it's totally appropriate to go in with someone else and have a nice gift from two or more people. You don't need to spend a lot. Something small and engraved with a sentiment appropriate to how well you know each other. It's not necessarily something useful or functional, think of it as a plaque or plaque substitute. You don't have to spend a lot, but depending on how well you know this person, you might include a thoughtful card or a something thoughtful to engrave in something silver, gold, glass, wood,or monogrammed on fabric (like a nice throw blanket, but probably not now in the summer). It could be an engraved keychain, money clip,golf bag tag,lighter, playing card gift set, or desk item, like glass etched clocks or paper weights. There are many items under $20. Start searching for engraved gifts on the Internet to get ideas. (Don't be scared if you first see the expensive items! Keep looking!) Or how about a magazine subscription or gift card to a restaurant?