They are adopted out to special puppy walking families who care for them as breeding stock. When it is time for the females to breed, they return to the Guide Dog Foundation where they are cared for while they have their puppies. The cycle begins again once the new puppies are born. Those dogs who aren't quite suited for guide dog work go on to other jobs such as search and rescue teams, drug dogs or arson detection dogs. Those that don't find another trade to work in are placed with loving families.
Many people sign up for the chance to get a retired dog.
You might be wondering what happens to the puppy walkers who prepared that pup to be a guide. If the dog doesn't make the guide dog program, the puppy walker may have it back as a pet, but usually, another puppy quickly takes its place to be raised in the loving home. Thank you to Jenine Stanley for her wonderful account of how puppies become guide dogs.