Firstly you need to understand that the typical form of afterlife in Second Temple Period Judaism was resurrection. Consequently, any reward or punishment takes place on earth, after people have been raised from the dead.
“Of the ten Gehenna texts the body is specifically mentioned in six (Mark 9:43, 45, 47; Matt 5:29; 10:28; 18:8) strongly implied in another (Luke 12:4–5) and not precluded in the remaining (Matt 5:22; 23:15, 33). This emphasis underlines two points. First, the final judgment is preceded by a bodily resurrection of the wicked. Clearly there can be no judgment on the body if the body is not resurrected. Second, the notion that judgment only takes place on corporeal persons intimates that there is no judgment in supposed other forms of existence. The emphasis on judgment on the body therefore precludes any punishment or judgment before the end of time and the Day of Judgment.”
Kim Papaioannou, The Geography of Hell in the Teaching of Jesus: Gehenna, Hades, the Abyss, the Outer Darkness Where There Is Weeping and Gnashing of Teeth (Eugene, OR: Pickwick Publications, 2013), 237–238.
Secondly you need to understand that the typical reward in Second Temple Period Judaism was life in the messianic kingdom of God, which was of course on earth. Punishment was exclusion from that kingdom. The people weeping and gnashing teeth in Jesus’ parable are being excluded from the kingdom, while seeing others enter. This is why in the parable of the rich man and Lazarus, the rich man is able to see Lazarus rewarded while he himself is punished.
“The outer darkness and weeping and gnashing of teeth usually appear as a conclusion to parables in connection to a banquet (Matt 8:12; 22:13; 24:51). The comparison of the kingdom to a banquet is metaphorical and therefore so is the outer darkness. Since most banquets took place in the evening, to be thrown to the outer darkness literally means to be excluded from the lighted, happy halls of the feast. It is a metaphorical expression of exclusion from the kingdom and not a literal description of the final judgment.”
Kim Papaioannou, The Geography of Hell in the Teaching of Jesus: Gehenna, Hades, the Abyss, the Outer Darkness Where There Is Weeping and Gnashing of Teeth (Eugene, OR: Pickwick Publications, 2013), 240.
For more details, see this previous post of mine in which I demonstrated that mainstream scholarship has largely abandoned the entire idea of the immortal soul. For a book length treatment on the history of mortalism, from a Christadelphian perspective, download this.
The word “hell” here is the Greek γέενναν, a transliteration of the Hebrew gehenna, meaning “Valley of Hinnom”, an area outside Jerusalem which was used as a trash dump. Fires burned there night and day, destroying the trash. During the Old Testament it became used as as a symbol of apocalyptic judgment, the punishment of sinners.
Note that the gospels refer to Gehenna as a place where body and soul are destroyed (Matthew 10:28, “fear the one who is able to destroy both soul and body in Gehenna”), not preserved forever in eternal torment. This is a post-resurrection punishment on people who are alive and in their own bodies, using the symbolism of a place where trash is destroyed.
“The destructive imagery associated with Gehenna reaches an apogee in Luke 12:4–5 (Part I, chapter VI). In language reminiscent of Isaiah 66:24, Luke records it not as a place where destruction is inflicted on the wicked, but rather as the place where the corpses of those already destroyed in the final judgment are thrown to be burned and consumed. Gehenna, therefore, becomes the place of the annihilation of corpses and impurities and as such, brings to a conclusion the punitive work of the judgment.”
Kim Papaioannou, The Geography of Hell in the Teaching of Jesus: Gehenna, Hades, the Abyss, the Outer Darkness Where There Is Weeping and Gnashing of Teeth (Eugene, OR: Pickwick Publications, 2013), 238.