UPDATED:
After hours of tweaking the text file, I have finally enabled retreating anytime after you die. I have only tested this for normal battles, so I'm not sure if it'll work in siege battles or quest-related battles.

THIS IS FOR MOUNT & BLADE WITH FIRE AND SWORD 1.142!!!

After getting one-shotted by some random bandit I decided to look for this ever so popular tweak. I couldn't find anything up-to-date (TweakMB, I'm looking at you), so I sought to find out how to do it myself.

I used this guide by Captain_Octavius, which was originally made for Warband, and took some liberties in editing for WF&S
(only minor differences):
http://forums.taleworlds.com/index.php/topic,129051.0.htm

Installation Instructions:
Extract the files in the zip to the "Ogniem i Mieczem" folder within the Modules folders in your Mount & Blade With Fire & Sword folder.
MAKE SURE TO BACKUP YOUR mission_templates.txt FILE

In my case, I would extract it to here:
C:Program FilesSteamsteamappscommonmount & blade with fire and swordModulesOgniem i Mieczem
As I have the game on Steam.

Also included is a backup file titled: mission_templates_original.txt
Just in case I did something horribly wrong with the file and broke a part of the game, so all ya gotta do is delete and rename!

Hope everything goes well, I'm hoping the differences between Warband and With Fire & Sword aren't too severe, or my editing may have done a lot of easily-reversible harm.