since you are on catalina, there will be no issue with non-compatible 32bit apps. you should also check your 3rd party apps for big sur compatibility. but, yes, IMHO it's always best to run the most recent macOS your machine is capable of. (which for your mac is actually monterey) running the most recent macOS also ensures you are using the most up to date security features.
but as of now, both catalina and big sur are still supported and getting security updates. as well, big sir has been updated and well tested by now and should run with little to no issues for you. if you want to stay with either of the former, you would do well to keep them updated with their respective security updates.
EDIT: you should always make a backup before upgrading macOS.