Martin Luther is well known for his saying, "We are simultaneously saints and sinners." A blogger friend has a post on this, and I thought I'd add a few more thoughts here.
I think Martin Luther is essentially right. Yes, in Jesus we're both declared and made righteous by faith. I accept imputed as well as imparted righteousness, both. We share in the righteousness of Christ by faith. So that Christ's righteousness is imputed to us for our standing in forgiveness, as well as imparted to us by the Spirit for the transformation of our lives.
At the same time we still sin, and can and do struggle over sin at times. Scripture makes it clear that we can and therefore should have victory over sin in our lives. I'm not talking about sinless perfection, but about saying, "No," to sin and learning to put off the old "in Adam" and put on the new "in Christ." This is both a decisive change at salvation, as well as ongoing. Yet we can also fall into sin, and actually we won't be completely transformed into the image of Jesus, until we see him as he is.
There also are sins hidden which we may be unaware of, sins of commission and sins of ommission. God will bring them to light as he works in us his children to conform us to the image of his Son.
I love the changed life in Jesus, but I also find that I can harbor sin in my life. But when we do so it's like holding on to death. We must make a clean, decisive break from sin, and this must be ongoing in our lives, in Jesus.
Any thoughts you'd like to share on this?