For the wages of sin is death, but the gift of God is eternal life in Christ Jesus our Lord. This well-known verse is often used when presenting the gospel to show that unsaved sinners will pay for their sin with eternal separation from God (death), and that they can escape that fate through the gift of eternal life that Jesus Christ provides. Is that how this verse should be interpreted and applied?
Having addressed initial justification and its benefits in chapters 3-5, Romans 6 has moved on to a discussion of the Christian life. Verse 23 is a conclusion or summary of the preceding thoughts in 6:1-22. This chapter is clearly written to believers who were baptized into or united with Christ (6:3-5), who have died with Christ, and now live with Him (6:6-11). The admonition to these believers is not to serve sin but God, because they are no longer under sin's authority, but under grace (6:12-14).
In verse 15 an imaginary objection is raised about whether being under grace might encourage believers to sin. While 6:16-23 grants the possibility that believers can choose to sin, it also gives reasons why believers should not serve sin. Simply put, sin leads to death (6:16, 21), while serving God leads to righteousness (6:16) which leads to holiness (6:19) which leads to everlasting life (6:22). Actions that meet God's standards (righteousness) set believers apart in a closer experience with Him (holiness) and a fuller experience of His life which they already possess as a gift (everlasting life). It is hard to escape verse 23 as a summary word to believers.
Since verse 23 is written to those who are believers, we must understand why they are told that sin leads to death, or better, that sin pays off ("wages") in death. In light of other affirmations about their eternal security in Romans, this can not mean that believers who sin will lose their salvation and be separated from God in hell (cf. 4:16; 8:18-39).
It is biblical and crucial to understand death here in the sense of separation rather than cessation. Someone who is physically dead does not cease to exist; they are just separated from their earthly bodies. On the spiritual level, death for unbelievers means they are separated from God's life now and potentially forever. For example, Adam was told that in the day he ate of the forbidden tree he would die (Gen. 2:17). When he ate he did indeed die, but he did not die physically or cease to exist. He died spiritually in the sense that he was separated from God's eternal life in his present experience and potentially forever.
Death for believers means they are separated from the benefits of God's life in their present experience. Believers have eternal life as a present possession and a future promise. They can not be separated from the possession of eternal life either in the present or future, but they can be separated from its experiential benefits (e.g. peace, joy, power over sin, etc.). When believers sin, they live in the same kind of experiential effects that sin produced when they were unsaved (6:19-21), the experience of shame and spiritual deadness.
While the initial possession of eternal life comes at the moment of justification through faith in Christ (3:24; 5:18), the enjoyment or ongoing experience of that life is the fruit of godly living. Eternal life is sometimes described as a relationship with God (John 17:3). Jesus Christ, with whom we are risen, has given the free gift of His life to us who believe and manifests that life in us as we live for Him.
A faithful interpretation of this verse in its context acknowledges that it was written to believers to admonish them not to serve sin, but God. But does this verse apply to unbelievers in any way? Though summarizing an argument to believers, verse 23 is stated as a general principle that can be applied to all people whether saved or unsaved. The verse applies to unbelievers in the sense that they, in their sin, are dead to God. The solution to their separation from God is the free gift of eternal life that comes through faith in Jesus Christ (cf. 3:22-26). Both believers and unbelievers can experience death, and the only solution for both is the free gift of eternal life through Jesus Christ.
Though 6:23 is written specifically to believers as a conclusion to an argument for them to live for God not sin, the summarizing principle is stated broadly enough to inform unbelievers who are still in their sins that their only expectation is total separation from God both positionally and experientially now and forever. It can be used effectively in a gospel presentation to show the consequences of not believing in Christ. However, believers should not overlook the primary purpose of the statement, which is to move them to serve God and not sin. Believers have been given a wonderful gift of God's life which they can only enjoy as they live for Him.