This is an interesting question, and the answer can be given from many aspects. Firstly it is worth considering the purpose and nature of choice itself. When we talk of freedom of choice or free will in this world, it is subjective. Are we totally free to do as we please and do what we like? Yes, of course! But are we all meant to do so? The answer to this question is no.
The fact is that each and every one of us has the freedom to do what he likes, but God did not place us here without purpose. The Finite world we live in was created by an Infinite Being and this goes to show the limitations we are born with. Under such a situation we, as human beings, should naturally be bound by certain restrictions as with any civilized society due to not being perfect in nature. The do’s and don’ts of civilizations have made us the progressive beings that we are today. So it is only befitting that man be born to live with certain limitations. In essence we have partial free will in as much as our actions are concerned, but we are limited with what to do when we recognize our true purpose of creation.
As the Holy Qur’an states, ‘Say, “This is the truth from your Lord, whoever wishes, may believe and whoever wishes may reject.”’ Thus proving that we may do as we please, either break the rules or follow them; regardless of anything, the choice is ours.
As far as the hereafter is concerned, we will be judged according to what we have done in this world. So the choice of what happens in the Hereafter effectively comes down to what we chose to do with our lives here in this world.
Thus, when we learn this, we also learn that they advised that we always ask the question in this way, ‘Will my Lord be pleased with me in the Hereafter? Have I fulfilled the rights due to Him?’ instead of thinking whether we will be better off or not. When the pleasure of God has been sought, there is nothing else that concerns man.
The God of Islam is truly beautiful. He is that Being Who runs toward the servant who walks in His direction. The God of Islam is that God Who treats His servant according to the servant’s expectation and perception of Him. Allah is He Who promises to reward man ten times over for any good deed and only once for any shortcoming. With this in mind, who wouldn’t want to please Allah?
Answering the question more directly, entering the hereafter does not constitute a demotion in status from what we were in this life. Why? Because even in the hereafter there are many stages and rungs, each one leading to a higher and higher state of paradise and a closer and closer connection with God. Therefore, in the next life we do not simply become robots or machines, but rather we continue to strive towards our ultimate purpose. It is just that in the next life, the veils and barriers begin to become lifted and we become to see more clearly. We begin to see the truth of the nature of God and His beauty, and therefore our strivings and our desire to become closer to Him become heightened. The trivial and vain things which we often strive for in this life become negligible, since we realise the true purpose of our existence. Therefore it is not that we become demoted as a result of no longer having free choice, rather we become elevated in our spiritual states due to the greater realisations and awarenesses that we develop.
To end, a related quote by Mirza Tahir Ahmad (rh), the 4th Caliph of the Ahmadiyya Muslim Community is presented below:
According to his [The Promised Messiah’s] profound study, the life in the hereafter would not be material. Instead, it would be of a spiritual nature of which we can only visualise certain aspects. We cannot determine precisely how things will take shape. One of the salient features of his vision of the hereafter concerns the soul giving birth to another rarer entity, which would occupy the same position in relation to the soul as the soul occupies in relation to our carnal existence here on earth. This birth of a soul from within the soul will be related to the sort of life that we have lived here on earth. If our lives here are spent in submission to the will of God and in accordance with His commands, our tastes gradually become cultured and attuned to enjoying spiritual pleasures as against carnal pleasures. Within the soul a sort of embryonic soul begins to take shape. New faculties are born and new tastes are acquired, in which those accustomed to carnal pleasures find no enjoyment. These new types of refined human beings can find the content of their heart. Sacrifice instead of the usurpation of others’ rights becomes enjoyable. Forgiveness takes the upper hand of revenge, and love with no selfish motive is born like a second nature, replacing all relationships that have ulterior motives. Thus, one can say a new soul within the soul is in the offing.
Taken From ‘An Elementary Study of Islam.’ The full passage can be found here: https://www.alislam.org/books/study-of-islam/life-after-death.html