You might be thinking of your characters get to a certain level in the game and retire to become famous NPC’s for future players and characters to encounter or hear tales of them.
However, what I want to think about for a bit, it using YOUR old characters as the NPC’s in YOUR campaign/world. How many of us have had perfectly good characters that you roll up and get to playing and maybe get to play in only 1 or two sessions before the group falls apart? Perhaps you manage to play in a lot of sessions and only gain a few levels. I have several of my more well-liked character’s sheets.
I have long thought of using them in my game. Some of them could make a cameo appearance, as their personalities would make for an interesting encounter in a town, dungeon, or other odd situation. Others might be NPC’s that have information the players can use, or might take advantage of or rob the characters.
Some of them could be thrown across the dimensions and just make a quick appearance as window dressing or a maguffin/red herring.
Some of my past characters did not have well-defined qualities, or only certain qualities that can still be useful for NPC’s. Why not take the creative energy you used to create those characters and use them to bring in whole cloth a new NPC, or borrow bits and pieces to make similar NPC’s. It can’t hurt to borrow NPC’s from all the DM’s you’ve ever experienced. I know I borrow the way my brother portrays hill giants. “Aw’rite, what ya got, we’e here ta loot ya.” As they menacingly tap a hug club in their hand.
Being a good DM/GM is taking ideas from all your experiences from TV, movies, books, and the rest of life to add a sense of life to the game. Why not include your past characters in the mix?