There are two words used in the New Testament that are often confused: hades (Gr.), the place of departed spirits; and gehenna (Gr.), the place of eternal punishment for the wicked. One of the reasons for these words being misunderstood is that the authorized version of 1611 (King James version) translates both words with the English word hell.
The Hebrew word sheol is used in the Old Testament in several ways. In each use of the word, it is related to death (e.g. Psa. 89:48; Gen. 37:35). The Greek translators of the Septuagint rendered sheol (Heb.) as hades (Gr.). So the idea of hades in the New Testament is very much like the word sheol in the Old Testament. It is the place where souls go after death.
In the New Testament the Greek word hades is used to identify the place of departed spirits. For instance, in Matthew 1 1 :23 the city of Capernaum is said to be "brought down to hades". Jesus said the "gates of hades" would not prevail against the church (Mt. 16:18). In Luke 16:23 the rich man is in torments and Lazarus is in Abraham's bosom. They were in hades, yet separated by a great gulf. In Revelation 20:13-15 death and hades are said to give up their dead. Death and hades are cast into the lake of fire (hell) which will be occupied by those whose names are not in the book of life.
Gehenna (Gr.) is the place of eternal punishment for the wicked. It would be accurately translated hell in English. Hell (gehenna) is comparable to "eternal fire prepared for the devil and his angels" (Mt. 25:41) and "lake of fire" (Rev. 20:15). Jesus warned us time and again of gehenna (hell) because of his love for mankind (cf. Mt. 5:22, 29-30, 10:28, etc.)
In the New Testament hades is the dwelling place of departed souls and gehenna is the place of eternal punishment even though both words are translated as hell in the KJV.