There are lots of links across the forums to help here, and I'd recommend starting with some of the sticky-ed threads. And, always, cfiresim.
The first thing I would say is: probably you're in awesome shape, but we need to see your expenses (including rental-related) as you project them in retirement to more fully answer the question.
The way I see the income side of the equation per year, assuming 3-4% withdrawal:
Keep all homes:
30,000-40,000, pre-tax, from $1 million invested assets.
65,000 from annuity
28,800 from rentals
That's $123,000-133,000, before tax.
Sell all homes:
invested assets = 1000000+0.96*525000-200000 = 1.3 million
(current assets + sell price less commission, assuming 525000 is net of remaining mortgage, - price to buy new home)
So,
40,000-52,000, pre-tax, from invested assets.
65,000 from annuity
That's $105,000-117,000, before tax.
Plus social security.
I wouldn't use these rough numbers to make a decision one way or the other, but more to say "we'll probably have $100,000 to $130,000 coming in before taxes, is that in the ballpark of what we need/want in retirement?" From your income of $165K my guess is yes but obviously that's up to you all and there are lots of other factors at play here that are opaque to us (e.g. your risk tolerance), things to consider much more in depth before you make big changes, etc.
At this level of assets I'd turn heavily towards what are our expenses going to be and how sure are we of that. In your shoes If my post-taxes "optimal lifestyle" expenses were <= $90,000 I wouldn't work another day unless I wanted to.
