I have an older answer that addresses this topic:

We tend to imagine the fall of the Roman Empire in terms of sound and fury: barbarian hordes crashing through city gates, temples collapsing in showers of sparks, drawn swords and ribbons of blood. For most people, however, the collapse of the Empire was marked not by a sudden or sharp transition, but by the slow unraveling of familiar things.

Our literary sources, such as they are, present the viewpoint and concerns of the elite. Saints' lives, despite their tantalizing glimpses of a wider and less mannered world, are only partial exceptions. Archaeological evidence helps, though the portrait it paints is pointilistic - an abandoned village here, hasty burials there, a decided shortage of fine pottery there, etc. This patchy evidence, however, suffices to confirm what we would expect: the fall of the Roman Empire was experienced very differently by various groups of Roman citizens.

In part, of course, it depended on where you lived, and on the historical circumstances that led to your particular bit of the Empire falling out of imperial control. Southern Gaul, for example, had a much easier transition out of the Empire than northern Gaul did. To an even greater degree, however, the way you experienced and understood the end of the Empire depended on how you lived - on whether you were rich or poor, urban or rural.

If you were a literate member of the urban elite, you had a clear idea of what it meant to be a Roman citizen. After traveling across the Empire, the fourth-century author and official Ausonius, a native of Bordeaux, ranked its cities in a poem (uncreatively) titled The Order of Famous Cities. At the top of the list, of course, was Rome "first among cities, the home of the gods." Later in the poem, describing his native place, he tellingly comments "I love Bordeaux, but I venerate Rome." For a man like Ausonius, acutely aware both of the legal benefits of Roman citizenship (as a member of the "better sort," he was entitled to special protections under the law) and of the Roman literary and cultural heritage, the Roman Empire had clear and deep significance.

But for the vast rural majority of the Empire's population, being Roman had a very different quality. Despite elite jibes that peasants didn't even know they were part of the Empire (the fourth-century philosopher-turned-bishop Synesius of Cyrene once joked that the peasants of Libya thought Agamemnon was the current Roman emperor), it can safely be assumed that even the most remote farmers knew something about the Empire in which they lived. The taxmen made sure of that, as (to a greater or lesser extent) did the priests of their local churches. The rural majority's understanding of the Empire, however, was not founded on high politics or literary heritage, but a vague sense that, somewhere very far away, there was an emperor, who battled barbarians and heretics. The products of Empire (as described in the excellent surveys of the archaeological evidence provided by /u/Tiako) had penetrated almost every corner of the provinces. Few peasants, however, would have had any sense of the vast trade networks that made this possible.

The collapse of the Empire, in short, would be experienced and interpreted very differently by a member of the urban elite than it would by a farmer in the hinterland. Your question asks about the average Roman citizen - but as I hope to have shown, there was no such thing. So let's take two examples - a Gallic noble, and a frontier monk - and see how they understood the disappearance of Roman rule.

Sidonius Apollinaris, a native of Lyon, is probably the best-known member of the final generation of western Roman aristocrats. Having served as prefect of Rome under one of the last emperors, he returned to his native Gaul and became bishop of Clermont. As bishop, he attempted to keep his city in the Empire, and outside the rapidly-expanding barbarian kingdoms of the Goths and Burgundians. But in 475, the year before Odoacer dispensed with the last western emperor, Clermont (despite Sidonius' opposition) opened its gates to the Goths. In a letter to a friend, Sidonius complained bitterly:

"The state of our unhappy region is miserable indeed....Our enslavement was made the price of security for a third party; the enslavement, ah! the shame of it!...[We].... who by old tradition claimed brotherhood with Latium [the region around Rome] and descent [like the Romans] from the sons of Troy...[have been betrayed]...Our ancestors will cease to glory in the name of Rome if they have no longer descendants to bear their memory." (Ep. 7.7)

For this aristocrat, leaving the Empire was the end of a world.

On, then, to the frontier monk, St. Severinus of Noricum. Severinus had established himself at Batavis, a frontier post devastated by frequent barbarian incursions. Probably in the same year that Sidonius watched the Goths enter Clermont, Severinus witnessed the end of Roman rule in Noricum:

"So long as the Roman dominion lasted, soldiers were maintained in many towns at the public expense to guard the boundary wall. When this custom ceased, the squadrons of soldiers and the boundary wall were blotted out together. The troop at Batavis, however, held out. Some soldiers of this troop had gone to Italy to fetch the final pay to their comrades, and no one knew that the barbarians had slain them on the way. One day, as Saint Severinus was reading in his cell, he suddenly closed the book and began to sigh greatly and to weep. He ordered the bystanders to run out with haste to the river, which he declared was in that hour besprinkled with human blood; and straightway word was brought that the bodies of the soldiers mentioned above had been brought to land by the current of the river." (Eugippius, Life of Severinus, 20)

As remarkable as this dramatic incident, however, is the total lack of commentary on the disappearance of Roman rule. The saint wept for the dead soldiers; but the fact that Batavis was now outside the Empire was apparently just taken as a fact. Severinus and his flock had more pressing matters (famine, barbarian raids, etc.) to worry about.

Most citizens of the Roman Empire probably only discovered that the Empire had vanished when a different set of taxmen appeared, or their priest mentioned distant disasters in his sermons, or barbarians suddenly appeared and evicted them from their land. For most Romans, life had always been hard. Now it simply became harder, and stranger.

First off, u/toldinstone's answer is excellent. I will try to add to it.

Would an “average” resident of the Empire (there was no such thing, but let’s just assume as a thought experiment) have perceived an ongoing decline? Probably not as such. On the one hand, the chnages that were happening were probably too gradual to be noticed in the course of daily existence; on the other hand, the events that were noticeable – catastrophes like major military defeats or occupations or barbarians setting up new kingdoms – may not have been felt as part of an ongoing process of “The Decline and Fall of Rome” (TM), so much as isolated events. Even such events that were locally catastrophic may not have attracted much notice in other provinces (for the breakdown of communication and a growth of parochialism were also concomitant of decline).

But if we slightly rephrase your question and ask instead, Would someone have noticed a decline if we could magically transport them from the year 400 or so to 500, or even from 400 to 600, then the answer is almost certainly yes, and to our hypothetical “average” resident of the Empire it may indeed have seemed that a world-shattering catastrophe had taken place. The barbarians that had always been raiding across the Rhine and the Danube had overrun the border and set up their own kingdoms within the Empire, and effectively replaced the Roman government. Cities had shrunk or vanished entirely, because the wide-flung interdependent economic systems that supported them had been shattered, and there was no more any infrastructure to maintain dense populations. Communities across the Empire were smaller and poorer; buildings, including the churches that were often the center of community life, were also smaller and more rudely built. Literacy rates (never high in the ancient world, by modern standards) had declined precipitously. Running water and plumbing became rare. It's also fair to say that not all of the changes were perceived as bad; some Roman citizens seem to have thought that living as a Frank or a Goth was better than living as a Roman serf, especially in Gaul.

A caveat: note that all of this, including the whole question of the “decline,” presupposes that we’re talking about the Empire in the West. The Empire in the East, which we normally call Byzantine for no particularly good reason, went on its merry way with relative continuity. There were changes, certainly, but nothing like what we see in the West.

Yet another caveat: Many of these changes that we associate with “The Decline and Fall of Rome” (TM), such as a decrease of economic sophistication, growing parochialism, a decline of literacy, etc, were parts of trends that had started well before and continued long after, and were not at all the immediately result of Rome being sacked by the Goths (which in itself had relatively little effect). Italy in particular, strangely, seems have to entered a period of sharp economic decline quite early.

Everything about this topic is enormously controversial. Traditionally, and still today popularly, people imagined a precipitous decline and fall where Roman civilization collapsed into barbarism (the East was and is generally ignored). Recently, historians have reacted against this perception, and emphasized continuity rather than change, and that any changes that did happen were gradual and not necessarily always for the worse. For a while, it was difficult for any respectable scholar even to suggest that there might have been a decline (and using the phrase “dark ages” is still heavily stigmatized). That seems to have balanced out a bit, and various historians have been expressing more nuanced views both of what changed and of what stayed the same, and emphasizing that different areas and different populations experienced both continuity and change very differently.

Sources and recommended reading: Wickham, The Inheritance of Rome (a generally optimistic work, stressing continuity and contextualizing what change did occur); Ward-Perkins, The Fall of Rome (a generally pessimistic work, stressing change and decline). These are two great books that go great together, and I suspect that the authors would mostly agree with one another's points and differ mainly in what they emphasize. Also worth mentioning is Heather, Empires and Barbarians, though its focus is mostly a bit later.

Thanks for your insightful overview of how different people from myriad backgrounds experienced the decline of the Roman Empire.

I’m a history buff, but I have to admit that I was not familiar w the sources that u cited in your analysis, except Odoacer, so I found it interesting to read. Thanks.