Will installing a new OS wipe out existing program and data files?

Using the archive and install option yes, your correct... all the system files will be affected, but personal apps and settings and preferences will remain mostly unchanged...

 

As a principle: If you don't have an external hard drive with a backup, go and buy one NOW and use Time Machine to backup your computer. Every hard drive in the world will eventually die, and when it does, and you have no backup, everything is gone.

Now once you have a backup, and everything is safe, the answer is: No, installing a new OS is not supposed to affect your applications and data. But it has happened that things go wrong. So you should have a backup; it is most likely that you don't need it, just like an insurance.

 

Apple is usually very good with their OS upgrades but ALWAYS a good idea to run Time Machine backup before upgrading.

Apple only replaces the system files not your data, it will all be intact where it was before but Backup Backup Backup it never hurts.

You will have a Happy Mac especially for $29.00 let Microsoft try that one