I was at that point a few months ago with my 1989 160E at 212,000K. First time any repair work had been done on the engine.
Complete valve job, guides, seals, gaskets, front cover. radiator, hoses, spark plugs, distributor cap, rotors, plug wires, all fluids and filters, new cam shaft and 2 valve rockers, new serpentive belt. Total cost: $2,000.
The timing chain and guides did not show any sign of wear or stretch.
The engine now performs like it did when it came out of the factory. Once the car is in the shop with the head off, you might as well give it the full treatment (money permitting) as the balance of the job will have to be done eventually, at additional cost. Just my opinion.