i saw a lot of wrong definitions of this word here, retardo is not referring to people, it refers to the retard, not the retarded people, i know it because I'm Brazilian and retardo is a word i use in my daily, and no, ratardo is not Spanish, it is Portuguese, so don't say it in a spanish accent .note: it can be a word in Spanish too but I'm not sure about it.
we usually use it when someone does something stupid.
it is considered really offensive so be careful using it
exemple :
hey i ate glue today
do you have retardo?
note: see?