If you encrypt your wallet and lose your passphrase, you will lose ALL your funds
This is an additional security feature and will secure your funds if third party get into possession of your wallet file
Any previous backups you have made of your wallet file should be replaced with newly generated. For security reasons, previous backups of the unencrypted wallet will become useless as soon as you start using the new, encrypted wallet
Open your wallet and go to
“Settings” --> “Encrypt Wallet...”
Enter passphrase and click "OK"
Open your wallet and click the “Lock” symbol
Enter your passphrase and click "OK"