It's always a good idea to back up your system before installing a software update, especially a major one like a new release of the operating system. That said, assuming no catastrophe strikes, your files and programs will be intact after installing the new operating system. While some prior version of Mac OS X offered several install options, including clean install, archive and install, and install in place, Mavericks offers no such options at the install menu, and by default preserves your files and programs.
However, not all programs will run the same under the new operating system. It is always possible that the install will break something (it did for me), and retaining a backup is a very good idea in case you decide you don't like the new OS, so you want to revert to the previous version, as I am about to do.