Truly a tough decision! We are not there yet, but I know the day will come as we have 3 levels and a medium-sized but elaborate yard with gardens and a pond. Fortunately there are MANY options, condos, townhouses, detached single family, apartments in our immediate area, and both daughters are nearby. So, I persist in clearing out whenever & wherever possible.

My parents set a good example, moving from a big home to a smaller one, then a mobile home. Finally Mom moved to successively smaller apartments as her health became worse, and they shed possessions all along the way. By then end, Mom had given everything of value to her kids and grandkids, and left a list of who was to get the remaining (lovely) furniture & her jewelry. We held a one-evening giveaway of the rest to her grandchildren, so each could have something to remember her by. It was lovely no tension, no fighting...in contrast to cleaning out my in-law's home of 40 years with only the help of my parents. My husband's sister still asks us to send her certain long-gone things - 25 years later!
Sue