I like an inch and a quarter to 1-1/2". It's very old school and how water was kept from wicking in before the advent of miracle felt. Cut the tabs off 3-tab shingles and install them rightside up so the sealer strip is right at the edge and 6-nail them as low as possible.
Look closely at the pic and see how far back the water wicked. Also notice the ice stays off the fascia too. It keeps water in the gutters instead of behind them too.
I will add my personal opinion and tons of years of experience, When you get ready to put a new roof on, unless those dormers are serving you a usefull service, looks like they may be for decoration only, I would loose them, let the roofers throw a few rafters in, sheet over with osb and shingle without those babies, it will save you a ton of headaches and if the city says anything about it, tell them the wind blew them off.
Unfortunately, I love those dormers. They give the room a vaulted look and add a lot of light during the day. I've talked to a few others in the neighborhood with the same configuration, and they are not having this issue. Probably just dumb luck as I can see they have similar shingling and flashing details.