It is normal for a boy's foreskin to retract anytime between birth and puberty, or even later.
There is no need for a circumcision, under any circumstances, except for frostbite, or if the opening in the foreskin is so small that it prevents urine from passing.
There is a good deal more information in the Men's Health forum, in a sticky at the top, called stretching to fix a tight foreskin, or something close to that. It is well worth a read. Ballooning, or having the foreskin fill with urine, is normal for a boy who doesn't retract yet. I see no sign of a problem at this time.
The Oster study in Denmark will back me up on that.

If this ever becomes a problem, and that is a big if, the steps are:
him gently stretching his foreskin with his fingers
if that fails, stretching combined with a prescription of betamethasone cream applied to the outside of the foreskin.
if that fails, which is close to never, you should consider a dorsal slit operation, which cuts the tight part, but does not remove anything.
if that fails, you should consider a circumcision.

Doctors like to operate. It's part of what they do. You should keep this in mind, and arm yourself with as much knowledge as you can, before you see the urologist.
The reason I mention this, is because I had my three year old circumcised, on the advice of three doctors, because he was unable to retract his foreskin at age three. It wasn't until years later, that I realized this was normal, and that the doctors were ignorant of basic human anatomy. Be conservative. Nature put the foreskin there for a reason, and two out of the three main erogenous zones on the penis are part of the foreskin.

Best of luck with your little man.

Before anyone else runs out and has their elementary aged boys circumcised, please talk to your urologist or doctor about using betamethasone cream.

My son has phimosis and I used betamethasone cream and he had a fully retractable foreskin. We started to see results within days. By 2 weeks, the foreskin could be retracted fully exposing the glans. Before this the whole at the tip of his penis was so tiny you couldn't see the glans at all.

Because circumcision has been the norm for decades here, most doctors and urologists in the US have no idea how to treat phimosis. They will recommend circumcision. If you want information on phimosis, you have to look to other countries where circumcision is not routine. There you will find the statistics that say it can take up to puberty for the foreskin to loosen. And even if it doesn't, there are ways of rectifying it w/o circumcising.