Microsoft 365 Archiving will become General Available shortly so the question is: Should you start using it now? As always, the answer is: "It depends"
If you have already exceeded the SharePoint Storage limit the answer is YES.
You might want to trim the number of versions before you archive the sites, in order to save additional storage.
You do not NEED to delete the content in the Recycle Bin as it will expire naturally(link)
Content affected by a Retention policy will likewise be deleted as expected.
However, if you are already trimming back the file versions nothing prevents you from deleting the content in the Recycle Bin, as this will maximize the reduced storage immediately.
If you are well in the green and don't need to archive any sites, you can choose to archive sites proactively or not.
Pros:
In most cases it is much easier to determine if a site should be archived while the owners of the site are still with the organization and still remember the purpose of the site.
De-clutter your environment. When old projects/cases are clearly marked as such, the active sites are more in focus and easier to find.
Content that has been archived is not used by any Copilot, and will ensure the freshness of the data used by the Copilots.
You are not paying for M365 Archive while you are below the SharePoint Storage limit.
Cons:
If you have to restore the site at some later date you will have to pay a restore fee to Microsoft, no matter if you have exceeded the SharePoint Storage limit or not. The current price for a restore is 0.60$/GB
Wrap up
As a rule of thumb, I will recommend that you start archiving sites as soon as possible.
If the risk of having to pay for restores is concern for you, I would recommend an intermediate workaround: Set the sites to Read-Only for a few months, and either archive them if they have not been accessed in that period, or just leave them in Read Only until you are getting near the SharePoint Storage limit. When that happens, you have a list of prime candidates for archiving.