What type of leave could be taken as terminal leave upon retirement or separation?

Annual leave is the correct type of leave that can be taken as terminal leave upon retirement or separation. Terminal leave allows service members to use their accrued annual leave as a way to transition out of active duty while still receiving pay. This type of leave is beneficial as it provides the individual with the opportunity to prepare for their new civilian life, engage in job search activities, or manage personal affairs before officially leaving the service.

Lump-sum leave represents a payout for unused annual leave rather than a period of leave taken. Emergency leave is typically granted for urgent family situations and does not facilitate a planned transition like terminal leave. Leave without pay is not compensated and does not serve as a transition mechanism upon retirement or separation, effectively rendering it unsuitable for terminal leave situations. Therefore, annual leave remains the only applicable choice for this context.