The building sector consumes approximately one-third of global primary energy. The energy and environmental performance of buildings for all their energy uses have to be revisited. Building energy retrofitting provides substantial opportunities to reduce the level of building energy consumption, saves cost, improves comfort level, and mitigates greenhouse gas emissions. Building retrofitting is a form of technical intrusion in the energy system of a building to effectively utilize its energy. The aim of the chapter is to identify the optimal cost-effective energy-retrofitting strategy. A holistic retrofitting scenario has been considered that includes reduced energy consumption, cost savings, capital investments, emissions, technology behavioral change, and comfort indexing, along with sustainability concerns involving geometry and envelope construction. However, this study primarily focused on energy systems within the building envelope. In addition, various uncertainty parameters and risk factors have been considered. Multifaceted optimal retrofitting strategies based on the optimized decisions are prioritized to address these challenges. Additionally, some challenges for simulation toolkits have been discussed for the success of the building energy retrofit project. This work helps building practitioners and researchers with in-depth understanding challenges for cost-effective optimal retrofitting within buildings to attain energy conservation and sustainability.