If I install Catalina, will my old version of word/office (12.1) no longer work?

To the best of my knowledge, there is no "Office 12.1". If you mean Office 2008, Update 12.1, no it won't work. What version of Office do you have? Office 2011 will not work. Office 2016, if it has been completely updated, will work.

That will not work. You need at least version 16 of Office to work with Catalina.

You can still purchase a one-time fee license for Office 2019 for Mac.

Or, you can use the free LibreOffice.

Or, you can use the Apple apps, Pages, Keynote, Numbers. While they can read and export Office files, the formatting and some document features are not supported.

Another suggestion of LibreOffice...

Look into the Free LibreOffice, it handles MS Office files…

https://www.libreoffice.org/

Apple macOS (Mac OS X)

The software and hardware prerequisites for installing on a Apple macOS computer are as follows:

• LibreOffice 6.3.x: macOS 10.10 (Yosemite) or higher

• LibreOffice 6.2.x: macOS 10.9 (Mavericks) or higher

• Intel processor

• 512 MB RAM

• Up to 800 MB available hard disk space

• 1024x768 graphic device with 256 colors (higher resolution recommended)

It is a recommended best practice to back-up your system and data before you remove or install software.

Notes:

• For certain features of the software - but not most - Java is required. Java is notably required for Base.

• Due to an issue, there are the following restrictions with Java: on macOS 10.10 and newer, JRE isn't found, JDK is required

• LibreOffice 4.3 can still run on OS X 10.6+, but please understand that this support ended when 4.3 was retired on May 27, 2015.

https://www.libreoffice.org/get-help/system-requirements/#Apple

Feature Comparison of LibreOffice v6.3 with Office 365/Office 2019 for Mac

https://wiki.documentfoundation.org/Feature_Comparison:_LibreOffice_-_Microsoft_Office