In the simplest terms, the Bible teaches that after death, the soul of the righteous goes to a place of comfort while awaiting the final judgment, where they will enter eternal life. In contrast, the soul of the unrighteous goes to a place of torment, anticipating eternal punishment if their names are not found in the Book of Life.
However, the answer is more complex than one might expect!
What is a "soul"?
Old Testament Usage
As is the case with many Biblical concepts, understanding what the Bible says about the "soul" depends first upon the words used to describe the soul. Many passages use the word "soul" simply to refer to an individual; for example: "Speak to the sons of Israel, saying, "If a person [soul] sins unintentionally in any of the things which the Lord has commanded not to be done, and commits any of them, if the anointed priest sins so as to bring guilt on the people, then he is to offer to the Lord a bull without defect as a sin offering for his sin which he has committed" (Leviticus 4:2-3).
Interestingly, the word translated "soul" in the Old Testament also refers to animals in the same way as humans. For example, "Then God said, 'Let the waters teem with swarms of living creatures'" [literally, "swarmers having a soul of life"] (Genesis 1:20). Thus, the word translated "soul" in the Old Testament refers to something that might be called an "animating force" shared by people and animals alike.
New Testament Usage
This principle carries over into the New Testament as well. The Greek word is psyche, and it refers to "that immaterial part of man held in common with animals" (The Complete Word Study Dictionary: New Testament). However, the way that this word is used in the New Testament raises issues that are not generally treated in the Old Testament. This is true because the word "soul" is linked with the word "spirit" in several passages, and both words deal with what might be called the "immaterial" part of humanity. However, the word "spirit" applies only to humans, whereas "soul" can refer to both humans and animals.
Therefore, the question, "What happens to the soul after death according to the Bible?" could more accurately be phrased, "What happens to the immaterial part of humanity after death?" This encompasses both the "soul" and the "spirit." Since both soul and spirit are part of humanity, and since having a "spirit" separates humanity from animals, asking the question in this way gets to the heart of the matter.
What does the Bible generally say about eternal destiny?
The heart of the matter is what happens to people – the "soul" after they die. That question can also be broken down into two parts: what happens to the immaterial part of people between their physical death and the final judgment, and what happens after the final judgment?
The final judgment is described in Revelation: "And I saw the dead, the great and the small, standing before the throne, and books were opened; and another book was opened, which is the book of life; and the dead were judged from the things which were written in the books, according to their deeds. And the sea gave up the dead who were in it, and Death and Hades gave up the dead who were in them, and they were judged, each one of them according to their deeds. Then Death and Hades were thrown into the lake of fire. This is the second death, the lake of fire. And if anyone's name was not found written in the book of life, he was thrown into the lake of fire" (Revelation 20:12-15).
What happens to the "soul" between death and final judgment?
That leads to the other part of the question: What happens between physical death and the final judgment? What happens to the dead who are in the sea or in Death and Hades before the final judgment?
Perhaps surprisingly, Scripture does not give a direct answer to that question. Paul writes: "But we do not want you to be uninformed, brothers and sisters, about those who are asleep so that you will not grieve as indeed the rest of mankind do, who have no hope."(1 Thessalonians 4:13). The imagery of "sleeping" is used here to refer to those who have died "in Christ," and are awaiting the final judgment. However, Paul does not explain what those who are "asleep" experienced during that time. In Luke 23, as Jesus is being crucified, one of the men being crucified with Him asks, "Jesus, remember me when You come into Your kingdom!" Jesus responded, "Truly I say to you, today you will be with Me in Paradise" (Luke 23:43). Clearly, there is a place for the dead in Christ to dwell, awaiting the final judgment (Paradise); just as clearly, there is a place for those who have rejected Christ.
The account of Lazarus and the rich man in Luke 16:19-31 supports this understanding. Both Lazarus and the rich man have died. Lazarus was "carried away by the angels into Abraham's arms" (Luke 16:22). The rich man also died, "And in Hades he raised his eyes, being in torment" (Luke 16:23). Although they had not reached their final destinations, there was no provision for any "change of address": "Between you and us a great chasm has been set, so that those who want to go over from here to you will not be able, nor will any people cross over from there to us" (Luke 16:26).
What happens to the soul after death according to the Bible?
As reflected above, there are two parts to the answer to this question. What happens to the "soul" – meaning the non-material part of a human's being – immediately after death, and what happens after the final judgment?
The final judgment.
Most Christians accept that there will be a final judgment, as described in Revelation 20:12-15. After that judgment, those whose names are written in the Book of Life will enter God's eternal kingdom; those whose names are not written in the Book of Life will experience "the second death" (see Revelation 20:14-15). Jesus describes the final judgment in similar terms: "Then these [those who are judged guilty] will go away into eternal punishment, but the righteous into eternal life" (Matthew 25:46). Some believe that the "second death" will result in destruction; others accept Jesus' description of the destiny of the wicked as "eternal punishment." The nature of this punishment is not nearly as important as the understanding that it is something to be avoided!
Between death and final judgment.
The question of what happens between physical death and final judgment is not clearly discussed in Scripture. The Old Testament merely refers to the place of the dead as "the grave" (Hebrew Sheol). In the New Testament, however, there is a distinction between the status of the righteous and the unrighteous in "the grave" (Greek Hades).
This is reflected both in Jesus' account of Lazarus and the rich man (see above) and in the depiction of Moses and Elijah at the transfiguration (Matthew 17:3). There is no indication that the righteous dead experience either punishment or ongoing perfection in "the grave." Rather, they experience the beginnings of what will be their eternal destiny after the judgment: "But Abraham said, "Child, remember that during your life you received your good things, and likewise Lazarus bad things; but now he is being comforted here, and you are in agony" (Luke 16:25).