There are a number of reference materials dealing with flag
retirement. See this reference for
some of the misconceptions about flag retirement ceremonies:
United States Federal Law provides: 'The flag, when it is in such condition that it is no longer a fitting emblem for display, should be destroyed in a dignified way, preferably by burning' (36 U.S.C. 176(k)).
The American Legion also has a reference to, History
of the Ceremony for the Disposal of Unserviceable Flags.
Below is a collection of sites that cover different types of flag retirement ceremonies: