New characters can come in by either an old character dying or the player choosing to retire their character to NPC status. This means I am allowed to do what I like story-wise for the old character, though I will listen to ideas.
New characters start at the average level of the party, at the starting amount of XP for that level. They also start with enough gold/equipment value of the appropriate starting wealth of a character two levels lower (see DMG135). So an 8th level character would start with 6th level gold, or 13k GP.
Retired and killed characters keep all their equipment and gold. Exceptions are at my discretion only.