How do I dispose or recycle an old iMac?

Check your local community (county, township, town, etc.) website for possible recycling options. Many communities allow e-recycling at their local trash/recycling facilities.

Also, Staples stores accept all kinds of electronics for recycling (no cost). So does Best Buy.

Please click Apple Recycling Programs to get started or if you have an Apple Store in your vicinity they will accept the computer. Before recycling it please execute all the steps in:

What to do before you sell, give away, or trade in your Mac

When you recycle you only need to take in the Mac, not the keyboard, mouse or power cord. You can keep them as spares for you new Mac - at least the mouse and keyboard. I don't know about the power cord.