Just picked this 86 500se up. Considering changing out wheels. Wondering if I went with 18in wheel along with dropping the vehicle 2in all the around will thus create rubbing issues

 

Welcome to the forum and congrats on the new ride! I'm attaching 2 links that I hope you find helpful. The first one is to our site's DIY tech articles on the W126 platform; in case you're going to be doing the maintenance and repairs yourself down the line. The second link should help with your inquiry on wheel fitment. Hope this helps you a bit.

Mercedes-Benz S-Class W126 (1981-1991) Technical Articles - Pelican Parts

Wheel Fitment & Spacing Guide