By Scott Burns

Q. My husband and I moved to Austin about 5 years ago. Tom is 65 and I am 63. Tom is a marketing research executive who was laid off in February of 2009. He has been unable to find work. In January of this year he and a colleague started their own research consulting firm. They are both very smart and good in their field. We expect this company to be successful. They are working on their first two jobs, with other viable proposals out in the field.

We used up all our savings to live this last year. Our income has been unemployment, my Social Security which I took at age 62 and rental income from a property that we own in Tucson. There is a home equity line of credit on the house in Tucson. We have been drawing on the credit line to supplement our income.

We own the house in Tucson outright. We paid $350,000 in August 2004. We moved here a year later and kept the house as a rental property (to avoid capital gains if we sold then). We got the HELOC before we left Tucson, and borrowed $40,000 to make the move here. We have borrowed another $50,000 since then. With the recession, the value of the home lost whatever appreciation it had. If we sold it now we would probably get $375,000 tops. After paying off the HELOC we might net $245,000. The tenants who are leasing will be leaving in the next couple of months. We need to decide whether to rent it out again or try to sell it.

We bought our home here in February 2008. It’s a new home and we paid $250,000 ($50,000 down). We don’t need this much house, but we cannot sell this property and buy anything else until Tom has 2 years of verified income.

Our only retirement funds right now would be Social Security and we have an annuity that we will start receiving in 2015. It will pay a guaranteed 7 percent (about $800 a month). The house in Tucson will provide other funds for income after retirement.

My main question is do we hold on to the house in Tucson as a rental property? Perhaps in a few more years it will appreciate. We worry about rental wear and tear. Or do we sell and invest the proceeds in a way that would be safe and profitable? This feels like a critical decision for us. We are not financially smart enough to figure this out on our own. — T.C. by email, from Austin, TX

A. A small consulting business needs cash because it needs to support accounts receivable— the inevitable 30 to 60 day delay between billing and payment for services. So you and your husband can expect to have a need for liquid assets as you build this business and pay your personal expenses.

You also don’t want to be managing a single rental property from a distance. While you aren’t exposed to the danger of needing to make a mortgage payment on the property, the operating costs on a large house aren’t minor, even if no one is living there. So I suggest selling the house in Tucson and getting on with your life. If you netted $245,000 from the sale you could use some of the cash to fund the business, and some to buy a smaller house.

If you sell the house in Austin, you might be able to buy a smaller, bank-mortgaged house if you put up a large down payment. And giving up on a bank mortgage doesn’t mean giving up on getting a home mortgage. Owner financing is a real alternative. Many sellers with other assets might be very interested in providing a mortgage at 5 percent, now that their other savings are earning far less.

Q. I just read your column about the problems with using the current formulas to continue to fund social security. I was planning to wait until I turn 70 in February, 2012 to begin collecting social security. I am working and decided that by waiting until 2012 will increase my benefit and also my wife's future benefit. Do you recommend that I apply now or wait, as I planned, until 2012 for my benefits?

Also, I recently found out that I am paying an increased Medicare premium because I'm not having it deducted from my Social Security (which I'm not getting yet). Isn't that something?

I would appreciate your recommendation. —M.P., by email.

A. Research indicates that a couple optimizes benefits if the husband delays taking benefits until age 68 or 69, so you have probably optimized the amount of benefits you will receive as a couple already. Waiting longer will increase your benefits but it may not maximize the total dollars collected, depending on how long you and your wife live.

You can always visit the local Social Security office and arrange to have your Medicare part B premium deducted from your Social Security payment— once you start to receive the benefit. They prefer deduction from your benefit because it makes things quick and easy.

I doubt that you are paying extra because of your payment method. You may be paying more because your premium is higher if your adjusted gross income is over $170,000 for a couple.