One more question--we are supposed to make quarterly payments; however, we retired in 2016 and our income is just mainly going to be social security and a small annuity.

The quarterly estimates are calculated assuming that next year will look like last year. If it's going to much different, the program doesn't know that. They are purely that "Estimates".  You don't have to send anything.

There is something call an "Under Payment Penalty".  That comes into play when you owe more than $1,000 when you file your tax return and you haven't paid in as much this year as you tax liability was last year.  Basically, they charge a penalty for not paying them sooner.

You can have withholding done by Social Security and most other retirement money custodians.

Take your best guess as to how much you tax liability will be next year and plan accordingly.  Paying money throughout the year in little bits generally beats having to pay a bunch next year.