1 Peter 1:4

“to an inheritance incorruptible and undefiled and that does not fade away, reserved in heaven for you,” – 1:4

In verse three Peter has communicated that God has such abundant mercy(never-ending desire to help us who are miserable) that “it” has begotten us to a living hope which is possible because of the resurrection of Jesus Christ. Now explains what this living hope is.

inheritance – this is the hope – the future object which we desire, an inheritance is something you get – not because of what you have done, but who you are – we get this because of who we are “we are His sons and daughters” (See verse 3, we have been begotten again, into the heavenly family above.), we don’t get this because of some works, or effort, or accomplishments, we get it because we belong to the family.

incorruptible and undefiled – this inheritance what we get because of who we are, or better yet, who’s we are, is “not liable to corruption or decay, imperishable” the same word is translated as immortal. So this inheritance is eternal life – (See John 3:16)

that does not fade away – the implication is in Greek that the inheritance is perpetual. 

reserved in heaven for you  – the inheritance is being “guarded, kept, held fast” for us in heaven. This is the same place that we have been begotten (born again or born ‘above’).

An application:

Father, thank-you for your abounding mercy, thank-you for being willing to help me in my miserable condition, thank-you for the new birth, in which I become apart of your family, and am in entitled to your inheritance, eternal life.