diff --git a/openedx/core/djangoapps/user_api/accounts/views.py b/openedx/core/djangoapps/user_api/accounts/views.py
index f338fd510177..412c62edc3f6 100644
--- a/openedx/core/djangoapps/user_api/accounts/views.py
+++ b/openedx/core/djangoapps/user_api/accounts/views.py
@@ -7,6 +7,7 @@
 
 import datetime
 import logging
+import re
 from functools import wraps
 
 import pytz
@@ -1070,7 +1071,7 @@ class LMSAccountRetirementView(ViewSet):
     parser_classes = (JSONParser,)
 
     @request_requires_username
-    def post(self, request):
+    def post(self, request):  # pylint: disable=too-many-statements
         """
         POST /api/user/v1/accounts/retire_misc/
 
@@ -1114,30 +1115,97 @@ def post(self, request):
             record_exception()
             return Response(status=status.HTTP_404_NOT_FOUND)
         except RetirementStateError as exc:
-            try:
-                user_id = retirement.user.id
-            except AttributeError:
-                user_id = 'unknown'
+            user_id, log_error = self._store_retirement_error(exc, retirement, "RetirementStateError")
+
             log.error(
                 'RetirementStateError during user retirement: user_id=%s, error=%s',
-                user_id, str(exc)
+                user_id, log_error
             )
             record_exception()
-            return Response(str(exc), status=status.HTTP_400_BAD_REQUEST)
+            return Response("RetirementStateError occurred during retirement", status=status.HTTP_400_BAD_REQUEST)
         except Exception as exc:  # pylint: disable=broad-except
-            try:
-                user_id = retirement.user.id
-            except AttributeError:
-                user_id = 'unknown'
+            user_id, log_error = self._store_retirement_error(exc, retirement)
+
             log.error(
                 'Unexpected error during user retirement: user_id=%s, error=%s',
-                user_id, str(exc)
+                user_id, log_error
             )
             record_exception()
-            return Response(str(exc), status=status.HTTP_500_INTERNAL_SERVER_ERROR)
+            return Response("Internal error occurred during retirement", status=status.HTTP_500_INTERNAL_SERVER_ERROR)
 
         return Response(status=status.HTTP_204_NO_CONTENT)
 
+    def _sanitize_error_message(self, error_message):
+        """
+        Remove common PII from error messages while preserving debugging context.
+
+        Args:
+            error_message (str): The original error message
+
+        Returns:
+            str: Error message with PII removed
+        """
+        if not error_message:
+            return error_message
+
+        message = error_message
+
+        # Remove email addresses
+        message = re.sub(r'\b[A-Za-z0-9._%+-]+@[A-Za-z0-9.-]+\.[A-Za-z]{2,}\b',
+                         '-', message, flags=re.IGNORECASE)
+
+        # Remove username values in various formats
+        message = re.sub(r"username='[^']*'", "username='-'", message)
+        message = re.sub(r'username="[^"]*"', 'username="-"', message)
+        message = re.sub(r'username:\s*[^\s,]+', 'username: -', message)
+        message = re.sub(r'username=\s*[^\s,]+', 'username=-', message)
+
+        # Remove common username patterns in error messages
+        message = re.sub(r'\bUser\s+[A-Za-z0-9._-]+\s+not found', 'User - not found', message, flags=re.IGNORECASE)
+        message = re.sub(r'for user\s+[A-Za-z0-9._-]+', 'for user -', message, flags=re.IGNORECASE)
+
+        return message
+
+    def _store_retirement_error(self, exc, retirement, error_prefix=""):
+        """
+        Store sanitized error information in retirement status and return user_id and log_error for logging.
+
+        Args:
+            exc: The exception object
+            retirement: The retirement object (may be None)
+            error_prefix: Optional prefix for the error message (e.g., "RetirementStateError")
+
+        Returns:
+            tuple: (user_id, log_error) for logging purposes
+        """
+        # Get user_id safely
+        try:
+            user_id = retirement.user.id if retirement else 'unknown'
+        except AttributeError:
+            user_id = 'unknown'
+
+        # Sanitize error message
+        log_error = self._sanitize_error_message(str(exc))
+
+        # Create error message with prefix
+        if error_prefix:
+            error_msg = f"{error_prefix}: {log_error}"
+        else:
+            error_msg = f"{type(exc).__name__}: {log_error}"
+
+        # Store error information in retirement status as plain text
+        try:
+            if retirement is not None:
+                if retirement.responses:
+                    retirement.responses += f"\n{error_msg}"
+                else:
+                    retirement.responses = error_msg
+                retirement.save()
+        except AttributeError as e:
+            log.warning('Failed to store error in retirement status: %s', str(e))
+
+        return user_id, log_error
+
 
 class AccountRetirementView(ViewSet):
     """