The three-time Stanley Cup winner and two-time Olympic silver medalist confirmed his decision Wednesday.
Rafalski says spending time with his family in good health is more important than the $6 million he would've made next season in the final year of his contract with the Detroit Red Wings.
The 37-year-old Rafalski had knee and back injuries that limited him to a career-low 63 games last season, finishing with just four goals. He had 79 goals and 515 points in 11 seasons with New Jersey and his hometown Red Wings.
Rafalski helped the Devils win two Stanley Cups and Detroit hoist one. The native of Dearborn, Mich., played for the U.S. in losses to Canada in the 2010 and 2002 gold-medal games.