It troubles me deeply to either recycle or give away this glorious 27" monitor of my 2020 iMac.
This is why I stopped buying iMacs. I hated either 1) throwing away a beautiful monitor when the computer aged out, or 2) having the computer stuck inside a dead display if the display crapped out. It was usually #1 that bit me in the ass and usually because of HDD/SSD space. I quit buying them and went with laptops or Mac minis plus external displays.
This is looking more and more like my best bet is to sell this iMac, which is in pristine condition, and buy the Mac Mini with the $1,600 Apple Studio Display. What's the easiest way to sell a used Mac?
If you live a big city, then Craigslist or FB Marketplace work well. Pricing is tricky, but I use eBay completed/sold listings as a guide then look at the local market for similar machines. The trick is to take great pictures and take the time to write a good description. I tend to price my stuff lower than others but then negotiate less. It will take some patience but if you're in a big enough metropolitan area then it will sell if you price it right. Or you could try eBay (I've done this safely) or Swappa (no experience.).
I also look at Apple's trade-in values to set a lower limit i.e. if I'm going to sell it, why would I let it go for less than trade? Unfortunately Intel trades are pretty much at zero these days, so this only really works for machines less than 3-years old.
To be honest, I got a 27" 4K for my Mac mini (begrudgingly - I wanted a 5K monitor but was denied by my work), and it's been way better than I thought it would be. I came from a 4K 21.5" iMac, so I was really bummed to go down in pixel density.
I scale it to 2560x1440 (same viewable area as the 5K 27") and I can't notice any fuzziness on text until I'm right up close to the monitor.
If it were a personal purchase, I'd absolutely not buy the Studio Display - not worth it, IMO.
I got one similar to
this LG from Amazon.
I respectfully disagree with this advice.
Coming from an iMac, OP will want an integrated experience with good speakers, color accuracy, and ease of use. I bought an Apple Studio Display (buy once, cry once) after testing many 27-32" 4K options. Either the color wasn't right, or there were compatibility issues (flickering, randomly turning on in sleep mode), or the sound was terrible, or the font rendering was off, or I couldn't adjust the brightness/volume from the keyboard, etc. The ASD has only one downside, and that's the price. Other than that, it's the best display I've owned. I picked up a second one used for $1,000 and couldn't be happier. If you're patient, you can get them for $1,299 during sale periods.