I hardly ever get asked this question.
Most of the time one or more of my kids are around and they ask "So you take care of the kids?" My usual reply is "yep" unless I feel like explaining much more.
Since DW has been on sabbatical for 2 weeks (out of 13), I don't think anyone has asked either one of us why we're always out and about, walking around, going swimming, lounging at the park, volunteering at the kids' school together, etc. Our friends and family already know what's up, and I guess we dress down enough that it doesn't draw a lot of attention.
But if pressed, I'm a writer (that's what I told the IRS on my 1040), "doing some freelance work", running a small web site, doing some odd jobs, taking some time off from full time work, taking care of the kids, and sometimes retired. Just depends on what kind of impression I want to leave. Most of the time I'm content as just another regular guy just like everyone else.
The rare times I've mentioned I'm retired to someone who isn't part of the FIRE community, it's been a complete non-event. Maybe it's so ridiculous as to be unbelievable, or maybe there's enough tech types and artsy folks and 40-something retired LEO and government workers that it's not a big deal any more.