Retroarch is already updated in the latest image as far as I know.
Am also not sure if it is my setup or a general ‘problem’. I had quite a few difficulties getting my XBox joypad configured in Retroarch due to the analog triggers being detected too quickly.
To configure mine I use the console based dialog in RetroPie.
I have to add that I converted my whole PSX collection to ISO and that is a lot, that might cause it to hang while enumerating.
So my advice: Try the newest image, update all and see if it works for you.
You are welcome.