If G is a group, a virtual retract of G is a subgroup which is a retract of a finite index subgroup. Most of the paper focuses on two group properties: property (LR), that all finitely generated subgroups are virtual retracts, and property (VRC), that all cyclic subgroups are virtual retracts. We study the permanence of these properties under commensurability, amalgams over retracts, graph products and wreath products. In particular, we show that (VRC) is stable under passing to finite index overgroups, while (LR) is not.The question whether all finitely generated virtually free groups satisfy (LR) motivates the remaining part of the paper, studying virtual free factors of such groups. We give a simple criterion characterizing when a finitely generated subgroup of a virtually free group is a free factor of a finite index subgroup. We apply this criterion to settle a conjecture of Brunner and Burns.