In my current position I don't handle backups nor restores. That's others' job. In my previous job, until the university IT department took over those responsibilities, we would hold onto backups for about 3 months. We'd rotate through the backup tapes, placing some of them off-site. Because I've been a member of SQL Server Central for several years, I learned the importance of testing restores. I can remember doing two such tests. (They worked fine.) I probably should have done more, not because we had a problem, but more just for the practice so that in an emergency I wouldn't be flustered.
However, if I were to do it to the data we have in my current job, WOW, that's hard to estimate. Working for a large state department there is so much data of various types, I don't believe you can say something like, "All backup data must be retained for 3 years." I'm guessing that, due to some regulations on certain data, some would have to be retained for longer periods of time than others. I've never asked the DBA's about the backup schedules they follow, but I bet they're complicated.
Kindest Regards, Rod Connect with me on LinkedIn.