In this paper, we investigate the output performance of a continuous-wave Ho3+-doped fluoride fiber laser operating at 3.92 µm from the 5I5 → 5I6 transition of Ho3+ using numerical simulation. A double-clad Ho3+-doped fluoroindate fiber with a doping concentration of 10.0 mol.% is assumed, with direct pumping at 888 nm. We propose simultaneous lasing on the 5I6 → 5I7 transition to enhance the slope efficiency while reducing the threshold and heat accumulation. Simulation results indicate that a slope efficiency of 17% and a threshold of 2.5 W can be obtained using a 9 cm-long fiber. Moreover, with the heat accumulation reduced by >40%, watt level laser output can be achieved in this cascade system at room temperature without the gain fiber being damaged by heat accumulation. The theoretical maximum output power of 1.27 W is 6 times higher than the highest reported value (197 mW), which is limited by the fiber damage due to excess heat load.