Psalm 1:4-5 says the wicked will not “stand in the judgment” or “in the congregation of the righteous.” These two descriptions indicate the wicked will be expelled from the people of God. Standing in judgment puts this psalm in an eschatological context.
To stand in the “congregation of the righteous” refers to defining God’s people. The “assembly” (עֵדָה) refers a gather of anything into a large group. Very often it refers to the people of Israel (Exod 12:6, for example). Modified with “righteous” it refers to people assembled to worship God (Psalm 111:1, for example). There can be no wicked in the assembly of the Lord (Psalm 25, for example).
The righteous are the people of God, the tzadik (צַדִּיק). The word can refer to an innocent person, but also to a person who is a devout follower of God. Ezekiel 18:5-9 provides a description of the righteous person:
Ezekiel 18:5–9 (ESV) “If a man is righteous and does what is just and right— 6 if he does not eat upon the mountains or lift up his eyes to the idols of the house of Israel, does not defile his neighbor’s wife or approach a woman in her time of menstrual impurity, 7 does not oppress anyone, but restores to the debtor his pledge, commits no robbery, gives his bread to the hungry and covers the naked with a garment, 8 does not lend at interest or take any profit, withholds his hand from injustice, executes true justice between man and man, 9 walks in my statutes, and keeps my rules by acting faithfully—he is righteous; he shall surely live, declares the Lord God.
This description is important since it includes some of the behaviors we normally associate with Law-keeping Jews (no idolatry or defiling a neighbor’s wife, walk in the statutes of the Lord), but the majority of the characteristics of the righteous person are social justice issues: they do not oppress the poor economically and they care for the hungry.
Modern Christians have misunderstood the Law to be a list of rituals which someone made people right with God, but the righteous person is the one who responds proper to God by caring for people who cannot care for themselves, the poor, widows, orphans and resident aliens.
In contrast to the way of the righteous, the way of the wicked will perish. The verb the writer uses here is not death, but rather “to become lost” (אבד). Psalm 119:176 uses the word to describe someone who is no longer following the commands of the Lord, he is like a “lost sheep that has gone astray.” A lost sheep will probably die, this is true, but the emphasis is on someone who has drifted from the path of righteousness by walking in the counsel of the wicked, standing int eh way of the sinner, or sitting in the seat of the scoffer (1:1).
Rarely does someone wake up one morning and announce they are recanting their faith (although that might happen). Usually there is a slow process of wandering away from the Word of God, slight, easy steps most people do not even notice. It is not until the final judgment that they will realize how far they have drifted from the Word of the Lord.