Luckily the times have changed. Largely, not completely. There are still plenty of places where the only way to get a better salary and job title is people management. However, other, more advanced companies already understood the differences between people, their natural strengths and career aspirations. Those companies offer at least double-tracked career progression - you can be either an individual contributor or a people manager.
These two careers couldn't be more different. You basically move from being a player on the pitch to being a coach on the sidelines. Instead of scoring yourself, you prepare the game plan and empower your team to perform.
Given such a choice, how do you know what path is right for you?
Start by honestly answering the following question: what brings you joy at work? Besides coffee and a lunch break.
Product management is not an easy job, it's full of stress and frustration. However, if you dig inside you might find that certain activities that you do as PM are actually enjoyable. I believe those to be different for every product person.
Writing specs, presenting, analysing data, designing an experiment, discussing a tricky topic with your team, brainstorming, strategising, crafting marketing messages, ideating... Think back a few months and remember things you did that brought you joy.
Now if more of the things that came to your mind are about your accomplishments - you might be more inclined to be an individual contributor. If things you remember as the most rewarding related to people and interactions with them, you might be better suited for people management.
That's not a science, of course. As PMs, we know we can't just rely on intuition. We need to validate.
Becoming a mentor is a way to test if you could make a good manager.
Mentorship is close to managing. The principles are the same: your main responsibility is to help someone achieve their goals. You do that by guiding them, providing support and holding them accountable. If you had fruitful experiences mentoring someone and you liked the process itself - perhaps you should apply for that people management position.
And wise-versa, if you were or are a mentee you can assess your experience and evaluate if you were able to achieve more with the guidance of your mentor. If you enjoyed the opportunity to learn and be more productive then perhaps you'd be happier as an individual contributor empowered by the right kind of manager.
Committing to the new
Whatever you decide in the end be sure to commit to your choice. Don't fall into the trap that many fresh people managers fall into. They can't let go of what they did before they became managers so they try to keep doing individual contributor work (or telling their reports how to do it) plus they try to manage at the same time. That usually leads to bad results and frustration across the board. Their direct reports are not happy as they don't feel their manager's trust or even worse, feel micro-managed.
So for the benefit of all, on your first day as a manager - let go of what you did in the past, cut those ties, however difficult it could be, and fully embrace your new role and responsibility.
If you don't enjoy your new managerial job - you could still come back to the individual contributor path. It wouldn't be easy and some people might be surprised. However, it should be normalised - some moves sound good in theory and prove to be wanting in practice. Your job is always changing and you, as a person and as a professional, are always changing. In some periods and environments you might be better placed to be a manager and in some other - you might want to get your hands dirty actually building the thing. We, PMs, are always looking for ways to add value to our organisations and choosing people management vs individual contributorship is just one important decision we have to make.