The traditional method of retirement is to incinerate the flag, but this does not mean that one should simply drop the entire flag (intact) into a fire.
A flag ceases to be a flag when it is cut into pieces. It should be cut up with scissors or shears in a methodical manner. The corners of the flag should be stretched out over a table top and someone should cut the flag in half, vertically being careful not to cut up the blue star field. Then, place the two halves together and cut them in half, horizontally. The reason we do not cut the blue star field is it represents the union of the fifty states and one should never let the union be broken.