I'm applying to as many R1 top schools as I can handle, 7 right now. These are all schools I would love to attend. I don't want to risk applying later as I am on the upper end of the 80% age bracket. If I miss getting in this year, I only get older. The only regret I could see is if I get into most or all of them, then it might seem to have been a waste of time. What a luxurious regret that would be.
Another reason for R1 is that I will need all the merit grants I can get, and with a high GMAT apparently I would be in the running for them. These grants are usually allocated early in the application round.
I am reserving R2 for pure safety schools. These are the places where I should get in easily and with a massive scholarship. They rank about 25-40, schools like Notre Dame, Boston U, etc. I would only attend them with a ton of financial grants. I will probably apply to 2 of these schools, provided I am getting all rejections up to the point of the R2 deadline. I should know a final decision from 2-3 of my R1 schools by that time. If I get into any R1 by the R2 deadline, I'm not doing any R2s at all, no matter how much cheaper these second or third-tier schools might be.
Currently, I've made the decision that it's not worth it to go outside the top 35 or so schools.