In a retrofit window installation (sometimes called “replacement windows”), you replace the window, but not your home’s framing, while both are replaced with new construction windows. While occasionally homeowners will update the window trim with exterior material or new treatments, the frame remains intact within the wall with a retrofit window. The new windows are installed into the existing space, avoiding modification or damage to the exterior and/or interior of your home, the need for extensive renovation surrounding the window, and reducing costs to the homeowner.
Obviously, this makes for a process which can be done for considerably with less disruption to your home, and at a lower cost. However, your results do depend on having a healthy window frame to work with. If the frame is poorly set in the wall, not flush, or needs extensive repairs, it may make more sense to replace it with a new construction window.
But if they work for you, retrofit window are an excellent and cost effective choice where homeowners do not need to remove or alter window frames.