I'm 55 and we (originally) downsized in 2007 when I was forty. Our only DS had just gone to uni and we were rattling around in a 3500 sq ft, six bed house. DH wanted to give up the stressful day job so we could both concentrate on our online business as well as the obvious attraction of being mortgage-free!
We bought a considerably smaller five bed house with small garden for cash, but our biggest mistake was moving location, long distance so we were far from ageing/ailing parents (mine were already late seventies by then and my mum was in the early stages of Alzheimer's).
We didn't last long there and soon moved closer to our original expensive south coast location, upsizing slightly again to a 2500 sq ft house, also with five beds but with a much bigger garden (third of an acre) as we realised how much we needed decent outside space and were also missing the internal square footage of the family home, especially when DS, his GF and friends/family frequently descended.
Sadly, whilst there both our dads died (vascular dementia) and as we'd bought a real wreck - considered uninhabitable by friends/family, that we renovated DIY - and with three parents in nursing homes prior to our dads passing, it was an incredibly stressful time. So much so, that as soon as the house was finished we sold it (tiny profit, so not for that reason 🙄). I think we both aged about ten years during our time living there.
We downsized again that time, to a fairly spacious and lovely, period four bed detached that still had a reasonably decent garden. A bit like a Goldilocks house, it felt just right size-wise and we were still mortgage-free. But what with all the stress of our sick parents and the building work at our previous house, our business had suffered badly. Three months after buying the house, my mum died and after that we struggled to settle/get motivated. I decided I hated the area - which was actually very nice - and we went into a bit of a downward spiral, culminating in putting the house up for auction (massive mistake!).
Prior to this decision, both of us had decided to blame the house for everything - after my mum died we'd decided I'd continue with the online business whilst DH got a job. That didn't work out well as his new 'employer' - an old business acquaintance - stitched him up and he ended up being owed quite a bit of money. Although we were mortgage-free, our household bills were massive (council tax was band G, yet the house was only worth £350-400k max) and we had issues raising the cash to pay them.
As I said, we blamed the house for all our problems and took the decision to downsize again to a simpler way of life in a smaller, more rural property where I think we were both convinced we would live 'the good life', like the 1970s TV show with chickens and maybe sheep, being self-sufficient as far as possible.
The house we chose - an old converted mill - only has two bedrooms and, whilst we have half an acre of garden, we never got the chickens I hoped for, let alone sheep! Ever since buying the place four years ago, I've hated it with a passion and we've reconfigured everything to the point it bears no resemblance internally to the house we bought. It's too small, too dark and I'd love to sell and upsize again, but although it's doubled in value since purchase, DH doesn't really want to sell - unless we could self build, which we'd struggle to afford - so we plan to extend instead, especially to give us the third bedroom we need now we are first time grandparents. I also feel it's too late now to move again and, tbh, I can't be arsed!
Annoyingly, the family home we sold back in 2007, is now worth upwards of a million and we could definitely never afford that!
I think the moral of my story is don't downsize too far, too soon and (although I admit it's hard) don't let family issues cloud your judgement when making such monumental decisions 🙁