One of the most frustrating aspects about the teachings surrounding our eternal rewards is the belief that our ultimate destiny is that of some kind of eternal, ethereal, spiritual existence floating around in heaven. Let's examine what the Bible really says on this matter. 

First of all, upon death, the Bible is clear, our spirit returns to God.

"Remember Him before the silver cord is snapped
     and the golden bowl is crushed,
before the pitcher is shattered at the spring
     and the wheel is broken at the well,
before the dust returns to the ground from which it came
     and the spirit returns to God who gave it."  Eccl 12:6-7

Paul confirms this by his statement in Philipians:

"But if I go on living in the body, this will mean fruitful labor for me. So what shall I choose? I do not know. I am torn between the two. I desire to depart and be with Christ, which is far better indeed. But it is more necessary for you that I remain in the body."  Phil 1:22-24

But this is not the end of the matter.

"I tell you a mystery: We will not all sleep [die], but we will all be changed - in a flash, in the twinkling of an eye, at the last trumpet. For the trumpet will sound, the dead will be raised imperishable, and we [who are alive] will be changed."  1 Cor 15:51-52

"the Lord Jesus Christ, who, by the power that enables Him to bring everything under his control, will transform our lowly bodies so that they will be like His glorious body."  Phil 3:21

So, at the last trumpet, something happens. Those who are dead will be raised and those who are alive will be transformed. Both are given glorious bodies. But where do we go from there?

"For the Lord himself will come down from heaven, with a loud command, with the voice of the archangel and with the trumpet call of God, and the dead in Christ will rise first. After that, we who are still alive and are left will be caught up together with them in the clouds to meet the Lord in the air."  1 Thess 4:16-17

Okay, so we meet the Lord in the air. Then what?

"Then I saw heaven standing open, and there before me was a white horse. And its rider is called Faithful and True. With righteousness He judges and wages war. He has eyes like blazing fire, and many royal crowns on His head... The armies of heaven, dressed in fine linen, white and pure, follow Him on white horses."  Rev 19:11-14

Who are these people "dressed in fine linen"?

"For the marriage of the Lamb has come,
     and His bride has made herself ready.
She was given clothing of fine linen,
     bright and pure.
For the fine linen she wears is the righteous acts of the saints." Rev 19:7-8

Now, just to clarify a few things. The term "kingdom of God" and "kingdom of heaven" are synonymous. These terms define the origins of this kingdom. So what is our eternal destiny?

"by Your blood You purchased for God
     those from every tribe and tongue and people and nation.
You have made them to be a kingdom
     and priests to serve our God,
     and they will reign upon the earth."  Rev 5:9-10

John records this again later on in the same book:

Blessed and holy are those who share in the first resurrection. The second death has no power over them, but they will be priests of God and of Christ and will reign with him for a thousand years.  Rev 20:6

So during the millennium, our destiny is to reign with Christ on the earth. And after this...

Then I saw a new heaven and a new earth, for the first heaven and earth had passed away, and the sea was no more. I saw the holy city, the new Jerusalem, coming down out of heaven from God, prepared as a bride adorned for her husband.

And I heard a loud voice from the throne saying:
Behold, the dwelling place of God is with man,
     and He will dwell with them.

They will be His people,
     and God Himself will be with them as their God.
He will wipe away every tear from their eyes,
     and there will be no more death
or mourning or crying or pain,
     for the former things have passed away.”

Rev 21:1-4