Time for some deep family discussions:
What is DW expecting from a new house? Would she + the kids love to have you hanging around in the house or only if there is more space so that you do not meet frequently (tongue in cheek). Are there other options, like remodel or addition to the current house? How much would the new house take away from your aassets?
What level of spending would she, kids and you feel comfortable with in your retirement?
How would you, she and they like to spend your time? How much cost attached?
And beware: if you decide for the new house make sure that the old one is sold quickly and before you cut ties.