How to Properly Dispose of an American Flag

My American Flag is getting faded, and I am going to buy a new one. Does anyone know how to properly dispose of the old one? I have read that you must cut off the union portion and cut off every stripe. Then burn each stripe one by one. Last you burn the union portion. Is this the correct method?
 
There is a very simple way for you to dispose of a worn out US flag. Take it to your local VFW or Foreign Legion Post and they will do what is necessary for disposal.

Simple huh?
 
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