Well that was fairly common in the British Empire Colonies. Quite often the colonial govenor was a retired military officer and in many cases not so retired. It was equally true that in many cases they were not. One thing you might want to do is impose fairly strict promotion restrictions. Then you can give someone the the title "Ret." if you would like to keep them around and use them as govenors. That way they are useful as govenors without being able to command ships.
I use R1&R2 Retire if (fitness<good) or (age>40), R3 Retire if (fitness<good) or (age>45), R4 Retire if (fitness<fair) or (age>50), R5 Retire if (fitness<fair) or (age>55), R6+ Retire if only if a combination of health, fitness and performance is not acceptable. I have a lot of "Granted time in service discharge." or "Due to poor fitness reviews granted a discharge." or "Due to poor health granted a medical discharge." in my retired officer pool. The time in service people would then give you a pool of civillians you could place in civillian leadership roles by granting them the title Ret. rather than Retiring them. You could also make the top 3 ranks somewhat political rather than military. Basically the Hamish Alexander position from the Herringswine books. So they aren't still serving on the front line officers.