I remember back in the 60's when there were retarded kids we never used any variation of the word "retard" in the presence of the parent of the child. We did however use the word as a precise description of the person's condition so we knew what we were dealing with.
The acceptable term at the time was "special" if some distinction needed to be made in front of the parent. Usually we just used the kid's name and tried to treat him as much like anybody else as possible. Sometimes this was a bit of a challenge. One retarded guy in his early 20s told me, and I quote, "The doctors say I am a vegetable, but I think I'm getting better." Deeply touching indeed.