Jonas learns that the Old are Released, or euthanized, when they get too old.
Jonas describes Release as occurring in three situations: with the old, with infants, and people who break three rules. He considers the Release of the Old as “a time of celebration for a life well and fully lived” (chapter 1 p. 7). It is not until he sees the Release of the newborn twin that he realizes it means euthanasia.
Jonas does also learn some information about how the old are cared for from his friend Fiona.
"Oh, there's lots to learn," Fiona replied. "There's administrative work, and the dietary rules, and punishment for disobedience—did you know that they use a discipline wand on the Old, the same as for small children? And there's occupational therapy, and recreational activities, and medications, and—" (chapter 12, p. 90)
This is in preparation for the Release of Roberto, so Jonas can see a Release before he learns what it means. Basically, the community allows the Old to live a carefree life and be pampered for awhile, before deciding they are a burden and killing them.