agreed that at this level it can be dangerous to your BR. but is the 1.65 it takes to move up a level really that much?
Yes, it is that much!
The relationship between risk of ruin and % of BR is extremely non-linear. For example, let's assume that the 5% rule is "safe", i.e. that it is very unlikely to lose your BR due to a bad run. If you started playing using 25% of BR, you are almost certain to go broke, not just 5 times more likely.
The flip side of this is what AG is saying. If you play "too safe", you are not getting enough profit. Say that you use 1/10% rule. The reduction of risk is not worth it. Say that, just for the sake of an example, the 5% rule leads to 1% chance to go broke per year. If going down to 1/10% decreases your risk to 0.001%, it may not be worth it.
Basically, the expected win is rougly proportional to the buy-in, but risk raises VERY QUICKLY above the "safe" levels, and decreases very quickly well below that.
So playing above your BR limits is NEVER a good idea. If 20% rake is a barrier, play at another site.
Poker World(and other skins) have SNGs as low as 10c with 10% rake (but very low volume during the day).
P.S. I am currently in the process of setting up calculations for OPTIMAL STT bankroll given a player's actual performance. So instead of using a rough rule like 5%, one would be able to calculate the exact risk given that player's performance. The performance is the distribution of 1st, 2nd, 3rd, and 4th+ places.
There is no formula possible, not even a spreadsheet can do that. So I would have to compute this in each case. If anyone is interested to obtain their optimal STT bankroll, then let me know and I will tell you what data I would need. Obviously, I would keep any such information in confidence.