I would decorate with items they like to do outside of work - i.e. golf, etc.
Outside activity idea is good.
a piece of advice I remember from years ago is to not give a person a gift for their main interest or hobby. . . that they themselves are most informed about what they would need, That might be true of decorations for their party. What about things that have never done but would like to do, say travel. . . or learn a sport, some things to do with new because a person retiring ts going to be living a new life.
This is a very good site with 14 ideas for retirement party decor:
I would use their favorite colors as well as favorite food or dessert, and also other interests such as fishing, golf, ball games, etc. I would include their family members also.