Close relationship's something suitable for retiring individual (7)
I believe the answer is:
nightie
'something suitable for retiring individual' is the definition.
(garment worn when retiring to bed)
'close relationship's' is the wordplay.
'close' becomes 'nigh' (similar in meaning).
'relationship' becomes 'tie' (tie is a kind of relationship).
'nigh'+'tie'='NIGHTIE'
(Other definitions for nightie that I've seen before include "Woman in bed in this" , "Loose garment" , "Skimpy attire" , "covering for retired person" , "Female article of clothing" .)