Assurance: Where Does It Fit?

Michael Spencer had this to say about assurance in the comments thread of the last post:

It's really hard for me to see how the Good News tells us to look to works for assurance. We do works for a number of Biblical reasons: God's glory, others' good, our joy, etc. But I can't imagine a single thing I have ever done that I would point to someone else and say "Look at that and you'll know that I am a Christian."

I will try to respond to this statement by laying out a proper view of salvation, and then by showing where assurance fits in the whole scheme.
The Order of Salvation as I understand it, as well as most of church history, is as follows.
Election>-Gospel>-Regeneration>-Conversion>-Justification>-
Adoption>-Sanctification>-Perseverance>-Glorification.

These can be divided up into four categories,

1. Set Apart For Salvation-Election and Gospel.
2. Already Saved-Regeneration, Conversion, Justification, and Adoption.
3. Being Saved-Sanctification and Perseverance.
4. Future Salvation-Glorification.

In Election God chose those who would believe to salvation, not based on their belief or any goodness in them, but solely for His good pleasure. The Gospel is preached to them by the power of the Holy Spirit and the Holy Spirit, through the Gospel call, sets them apart for salvation.

In Regeneration the Holy Spirit wakes the dead, and imparts faith and repentance (Conversion). Upon Conversion they are declared righteous by God Himself (Justification) and as such they receive Adoption as children. All this is God's work for and in us.

In Sanctification we become co-workers with God as He makes us more holy (like Christ), and we strive for the same holiness. Perseverance is also done in cooperation with God as we are kept by God and continue in faith and repentance.

Glorification is the goal of the 'Order of Salvation' in general. Glorification occurs not at death, but at the resurrection, which takes place at the return of Christ.

Having now set the context for salvation, we will turn our attention to proper definitions of Justification and Sanctification.

Justification is the act of God occurring after conversion (faith and repentance) by which God forgives us for all sin that we have committed and declares us righteous on the basis of faith in Christ.

Sanctification is an act of God and man together by which man is conformed to the image of Christ. Not only are God and the individual Christian at work in sanctification, but also the community of believers at large are working for the common sanctification of one another.
Justification and Sanctification are similar in the respect of our standing before God.

Justification says that we are righteous and Sanctification makes us what Justification says we are. But even in this similarity there is much that contrasts the two doctrines. Justification is a legal term which states that in the eyes of the court we are not just innocent, but righteous. Sanctification is a practical term that takes into account the fallenness of each and every one of us and prepares us for the day when we must appear before the Judge of all creation. But we have this confidence, that Sanctification will be completed when we receive our new bodies.

So where does Assurance fit in? Assurance is to be found in the first three aspects of salvation, but not in the fourth because no assurance is needed when the substance is realized. Assurance can be seen in the first three aspects of salvation in these various ways;

Set Apart For Salvation
Assurance must be found first of all in God's electing work. It is God who has chosen us and determined to save us, therefore, this must come to pass. A further assurance is that we have been called out by the Holy Spirit. If the Spirit has called us through the preaching of the Word, then it must be that we have been set apart for salvation.

Already Saved
Assurance next is found in the work of God in our lives. After the Gospel Call has gone forth the Spirit, who goes forth in that gospel regenerates us. It is again a sovereign work of God that gives us assurance. We respond in faith and repentance, yet another assurance that we will finally be saved. At the moment of conversion we are declared righteous before God, meaning that we have assurance of our salvation based on Christ's righteousness and not our own. We are also adopted, and that gives us assurance that we are sons of God and joint-heirs with Christ.

Being Saved
As we are in the process of being saved through sanctification and perseverance we have two more assurances of our future salvation.
The first is that we are being sanctified. Not that we are made instantly perfect or that we never sin, but that over the progress of our lives after regeneration we can see a trend of actions that show us that we are becoming conformed to the image of Christ. This is not for me to give someone else assurance of my salvation (although Paul sometimes used it to prove his Apostleship), but for a confirmation of the presence of the Holy Spirit in my life. Everyone who has the Holy Spirit will be conformed to the image of Christ.
A second assurance that we have as we are being saved is that we are persevering to the end. Not only did we believe the Gospel at the beginning of our salvation, but we continue to believe the Gospel. Not only did we repent of sin at the first, but we continually are repenting of sin as it reveals itself in us. We did not place all our trust in Christ only at one moment in time, but we continue to trust Him. If we are not believing and repenting right now, then we have great reason to doubt our salvation.

And by this we know that we have come to know him, if we keep his commandments. (1Jo 2:3) ...but whoever keeps his word, in him truly the love of God is perfected. By this we may be sure that we are in him: whoever says he abides in him ought to walk in the same way in which he walked. (1Jo 2:5-6)
If you know that he is righteous, you may be sure that everyone who practices righteousness has been born of him. (1Jo 2:29)
No one who abides in him keeps on sinning; no one who keeps on sinning has either seen him or known him. Little children, let no one deceive you. Whoever practices righteousness is righteous, as he is righteous. (1Jo 3:6-7)
By this it is evident who are the children of God, and who are the children of the devil: whoever does not practice righteousness is not of God, nor is the one who does not love his brother. (1Jo 3:10)
We know that we have passed out of death into life, because we love the brothers. Whoever does not love abides in death. (1Jo 3:14)
Little children, let us not love in word or talk but in deed and in truth. By this we shall know that we are of the truth and reassure our heart before him; for whenever our heart condemns us, God is greater than our heart, and he knows everything. Beloved, if our heart does not condemn us, we have confidence before God; and whatever we ask we receive from him, because we keep his commandments and do what pleases him. And this is his commandment, that we believe in the name of his Son Jesus Christ and love one another, just as he has commanded us. Whoever keeps his commandments abides in him, and he in them. And by this we know that he abides in us, by the Spirit whom he has given us. (1Jo 3:18-24)
Everyone who believes that Jesus is the Christ has been born of God, and everyone who loves the Father loves whoever has been born of him. By this we know that we love the children of God, when we love God and obey his commandments. (1Jo 5:1-2)
We know that everyone who has been born of God does not keep on sinning, but he who was born of God protects him, and the evil one does not touch him. (1Jo 5:18)