“We’re not middle and lower class, we’re all working class”

Most home owners, if they cash out their home, and either rent or downsize, will still absolutely need to work to eat, and if they don’t they will find themselves homeless before long.

For that small portion that could actually live on the equity from downsizing their housing, yeah, they are upper class, but there are a lot fewer of those than you would think. For a single person, a million in equity (50k a year) might get you by, but not luxuriously and not safely, and most houses are owned by couples though (so cut that in half), and many have dependents.