At work I am constantly being made fun of, and also in my group of friends. While I know they are not doing it out of hate, how do I become witty enough to at least retort?

Watch all seasons of Rupauls: Reading is Fundamental. You will get the hang of it ;)

https://www.youtube.com/watch?v=U96SRUTvmQo&t=291s

Watch american shows!!! Like big bang theory and the likes

Most clowns would be green with envy at you.

Because you can make people laugh without doing anything.

On a more serious note, laughing along is fine. Based on that I assume that it is harmless and not personal attack jokes.

As for tips. Well how do you teach someone to be quick witted and fast thinking.

I can only suggest you pay more attention and when the joke starts already be thinking of a response.

Practice makes perfect.

Or prepare a cue card. Blank.

Whip it out when it happens again.

Your friends are bound to ask what is that.

And you can say you wanted to prepare some replies but it's blank.