If he's academically ready, I wouldn't hold him back. I think all boys have a hard time sitting still. I know my 6 year old does and his school didn't say anything about repeating kindergarten.
If they are giving you the option, I say let him go to first grade with his peers. I'm sure with time he'll get better :)

I have taught first grade for the past 6 years.  My experience is that boys handle the pressures of first grade better when they are more mature.  It sounds like he has learned a lot this year and this will be crucial to his future success in school.  However, social maturity is often as important as academic readiness.  There is a significant difference between the demands of kinder and the demands of first grade.  It isn't like when we were in first grade.  Students that are socially less mature have a very difficult time adjusting to the pressure.  Its too much and it shuts them off to the point that they don't like school.  Their focus is so much on playing and learning through play that they don't get their work done, have an extremely difficult time following directions, and become frustrated and may even lose motivation. Teachers don't want to keep students back and don't make this suggestion lightly.  As a teacher I can't image your son's teacher making this recommendation unless she/he thought it was the best thing for your son's academic success both now and later.  It isn't a punishment for your son.  Retention has such a negative connotation, but at this age kids don't know the difference.  It's better maturity issues be addressed now rather than when he is older and retention really does become a social stigma.  If you are upset and feel negative about it, then your son will respond the same way.  If you are positive and look at it as an opportunity for more practice to learn kinder skills so that he's an expert, then he'll respond in the same way.  Obviously, I don't know your son and so this is just my opinion based on my experience.  Take it for what it is.  Sounds like you are a very loving mom.  He's a lucky little boy!  :)

It is never easy to be the youngest in a class, especially if the child is a male.  If the teacher has recommended retention (I wish education lingo could create a more positive word), I would seriously consider it.  In my 30+ years of teaching high school English, I could still identify the students who were a bit behind because of their age.  It can take through high school to "catch up" with those students who are on the older side.

I would recommend retention and educational supplementation so that he doesn't get bored.  What a fun year to experiment with another language, science, history, music and art.  Find programs in which he could excel.

Good luck.

I totally understand your situation and it is sticky no matter what anyone says. First of all repeating Kinder is not a retention. It is considered a 2nd year of continuation which public schools are allowing due to NCLB. Your son is a November baby, late in the year so he entered school as a Junipor K. Keep in mind Boys mature later than girls. I had 7 Junior K's in my room, 4 boys and 3 girls, the other 11 were K's.  At the end of the year I administered an exiting assessment in academics and social behaviors. 3 of my boys could not sit still for more than 5 minutes, were allowed to sit in a chair, stand in place or move only on their colored apartment. However they were so bright, great readers (at the end of 1st grade expectation), good presenters, imaginative ideas, great complex thinkers, learn new concepts fast and it goes on but they had a hard time following rules, sitting still, completing the writing work. I decided to move them up to 1st due to academic abilities and parent input. Also fine motor skills are developmental and in time they will get it. The 1st grade teacher was also informed of these young students and their challenges. She just might use the same action plan I developed to help support these young kids. I wish you luck and ask for evidence from the teacher, team and school. If he does go to 1st, you will need to play a bigger role in his learning, keep that in mind too.