To put it simply, Charles V was tired. He'd overseen the expansion and consolidation of his families possessions to their peak. He'd formed the administrative and legal changes which would eventually lead to the creation of the nation state. He oversaw the expansion overseas. All that time, he moved between his lands constantly and spent almost no time at peace - crushing rebellions in his dominions, wars with France, the Barbary pirates, the confrontation with an Ottoman empire at its peak, ... but the most important and taxing aspect were the religious wars.

Protestantism had popped up all over his lands and Charles V, as a fervent Catholic, fought it tooth and nail. While the Netherlands would erupt under his son's rule, Charles himself got involved in the religious wars in the Holy Roman Empire (though they were also part of a larger struggle between the Emperor and the other large houses in the HRE), particularly the wars with the Schmalkaldic League. After the Fürstenaufstand of 1552, both parties finally agreed to the Augsburg Settlement which essentially recognised Lutherism in the Holy Roman Empire with the principle of cuius regio, eius religia - each region its religion.

Charles V took this Augsburg Settlement as a personal defeat. The Augsburg Settlement was signed on 25 September 1555, he abdicated a month later on the 25th of October. (Though it should be noted that he already started abdicating smaller titles and parts of his empire as early as 1554.) He decided to retreat to a villa next to a monastery in the country for his remaining years, leaving his empire to his son and his brother. His health had gotten worse at that point, which could've led to the general exhaustion the man suffered, and he died in 1558.

I should specifiy that I mean the Charles of the Holy Roman Empire.