You need to increase the vector size by the radius of the bit only on two opposite sides. for a 6" x 6" box the outside vector needs to be 6" x 6 1/4". Actually, in practice I would make that 6 1/8 x 6 1/4 to be sure I cut all of the edge.
A minor correction, but the principle could save time on a larger project.
Edit: If you are adding to all of the sides, the theoretical addition on each side needs to be only cutter radius/sqrt 2 = .125/1.414=.0884. But now I am picking at nits.
Good judgement comes from experience.
Experience comes from bad judgement.