Q: Knowing that we are saved by grace alone (Eph. 2:8, 9), how are we to understand John 5:29 which speaks of those doing good and those doing evil?
A: There is no contradiction between being saved only by faith in the grace of Christ, and at the same time speaking of the judging of people’s works at the Last Day. Faith in Christ alone is what saves. Good works are fruits of that saving faith. Good works are not important for salvation, but they are important as evidence faith exists. This is reflected in an answer given in our synod’s Explanation of Luther’s Small Catechism: “What will Jesus judge when He returns… When Jesus returns, he will judge, also according to human nature, the thoughts, words, and deeds of all people for evidence of faith.
Only works which proceed from a heart filled with gratitude for the fact that God has justified sinner purely by his grace are truly the good works in the eyes of God. These works will be rewarded in the various degrees of glory in heaven. [Passages which mention these degrees of glory are: Dan. 12:3; Luke 19:16-19; I Cor. 15:41, 42; Gal. 6:8, 9; II Cor. 9:6; and Matt. 5:11, 12.] But the believers in Christ will be surprised to be honored for their good works (Matt. 25:37), for they continually stress that their holiness required for heaven is found only in the righteousness of Christ given completely by grace to sinners.