If my Mac is running macOS Sierra, do I need to upgrade it?

The following may help: How to upgrade to macOS Big Sur - Apple Support

Also, be aware that Catalina and Big Sur will not run 32 bit apps so you may have some apps that will need to be upgraded. See: 32-bit app compatibility with macOS High Sierra 10.13.4 and later - Apple Support

The model year of a MacBook Air is available at Apple menu > About This Mac.

A late-2010 through mid-2011 MacBook Air can be upgraded to High Sierra 10.13.6 but no later version.

A mid-2012 MacBook Air can be upgraded to Catalina 10.15.7. See: https://support.apple.com/en-us/HT211683

A mid-2013 or later can be upgraded to the current version of Big Sur. See: https://support.apple.com/en-us/HT201475

Personally I would update it if possible due to the age of Sierra.