Replacing retaining wall without blowing up my pool

[Christopher Makley]

Bought my foreclosure last year and one of the items on the list was to replace the retaining wall on the end of the pool.  You can literally push a pen into the wood up to the barrel.  Not sure if I can just build a second wall in front and then backfill or if I should tear the whole thing down...and even more of a stupid question is how long do I have to replace it after tearing down before worrying the dirt will begin to fall apart?  The wall has been there for decades (obviously updated or replaced at least once).