I’ve been using the 1914 contested rules recently in my WWII games, allowing the defender to attempt retreat if they want. 
Before any round of combat except the first, the defender may attempt to retreat, rolling one die and if the number rolled is less than the round of combat about to begin they may retreat.  All retreats, including attacker retreats, remain in the territory they are in and that territory becomes contested.  No more strafing territories, although I am considering giving tanks and mechs the ability to retreat as per normal attacker retreat rules if they have only used one movement point.  Planes cannot land on newly contested territories.  I let amphibiously landed forces retreat under these rules.
I also use modifiers the defender can add to the combat round.  +1 if you have three or more different land units on the territory, including minor ICs.  +1 if you have a major IC.  +1 if you have one or more fighters or two or more tactical bombers.  All modifiers are counted before combat begins and count for the entire battle even if lost during combat.
This creates at least one problem though in G40.  If France doesn’t fall turn one, Germany is likely in bad shape.  Something simple can be not allowing France to retreat, at least on turn one.  Or give Germany and Japan a blitzkrieg ability, where the first turn they are at war with an allied power that power cannot retreat, including turn one.

This rule can easily be adjusted to either make it harder or easier for the defender to retreat.

I use the same rule for naval units.  Defending naval units that retreat are ignored in cases of amphibious assaults, and scrambled planes that retreat are placed on the territory they scrambled from, but cannot defend against any attacks nor be counted towards defense retreat modifiers for that territory, and are lost if all other units are destroyed. 
Defending naval units get +1 for three or more different warships in a sea zone, and +1 for one or more fighters or two or more tactical bombers. 
Transports that begin their turn in a hostile sea zone get the additional option of remaining there if you attack the enemy units in that sea zone.  If the sea zone is no longer hostile after the combat round then the transports may make a noncombat move, including loading troops in that sea zone.
Lone transports are never auto killed, but must be destroyed by a hit, and can retreat like any other unit even if they are alone.

Super Submarines: Defending submarines hit on a 2 or less.

Why this as opposed to attack @3?  Or if you are going to change it, why not something better(in my opinion of corse), like destroyers only negate a subs surprise strike and submersible abilities on a one to one basis?

I figured my first post should be here, since this game is what hooked me.  My first game was in 6th grade when the whole grade had a gaming day, and by chance a group needed one more for their game of axis and allies.  I remember being completely overwhelmed by the game, but completely hooked too.  My best friend eventually bought the game, and I couldn’t try and count how many games we’ve played since.  Our favorite thing was to just have a sleepover at someone’s house and play axis and allies all night.  Somewhere down the line we played with someone who actually new the rules correctly, and it was like discovering the game all over again.  I’ll always love this game.  Too many good memories.  On a side note my only copy of this game I found at a thrift store.  Only 3 bucks and everything was there and in pretty good condition.  By far the best thing I ever found at a thrift store.  I couldn’t believe the luck.  I think I was in shock when I saw it there on the shelf, though I immediately figured it was probably empty, or at best half full.  My excitement must have been easily visible as I sat on the floor of the store carefully looking to see that everything was there.  My friend for some reason never liked to bring up the fact that he spent 50 bucks for a game I found for only 3.