I guess the lesson is to expect the unexpected (except, of course, The Spanish Inquisition). I never expected to downsize from thousands to hundreds of square feet, but it's happened. I truly sympathize; the idea of reducing my life's accumulation to one room is unimaginable. I can see that I am at an intermediate step in downsizing. I'm still head of household (nominally; my Eva might dispute that). When we (or I, considering the unexpected) can no longer manage a household on our (or my) own, there will come at least one more step.
I am fortunate that our new house has a pole barn which is slightly larger than the house itself (1500 sqft vs 1200 sqft, although the house has a full basement not counted in the 1200 sqft). I can delay setting up my shop (advanced hobby machining, and electronics) in the barn and use the barn to sort the things that I will keep and the things I will let go. Probably the most difficult will be drastically pruning my 20,000 book library. These days I mostly read using an iPad running the Kindle App, but some of those books I have had for more than seven decades. Many of the rest are not available as eBooks.
I've always collected objects and materials, just in case I might find a use for them some time in the future. That has to come to an end, and I will have to prune that collection as well. Materials can mostly be purchased as needed, so all but the most exotic materials can be sold off or scrapped. Objects will need some thoughtful weeding to save only the best of the best (made more difficult by my tendency to play with everything I dig out of old boxes). Some of the things are items that my father collected in much the same way, that I saved after he passed (like old wood whiskey boxes that he collected in the 1920s to house his own growing accumulation). This means that there may be items over 100 years old that will need to be curated for historical or family value as well as pruned.
I may be able to cut down the size of my tool collection by getting rid of some duplicates, but in many cases they are not truly duplicates, but variations, each more useful than the other depending on the specific job. (I may have to get over that attitude.) Some of the tools have a family history, either from my father or from my mother's father, both of whom were serious tool users.
It's gonna be a long job (probably made worse by some tears, but better by some good memories). I think I may video some of the sorting with some commentary. My daughter and grandchildren may someday be able to use the videos to make sense of all this stuff and make some decisions on their own about what to preserve and what to discard.