Here's what I do.
First of all, it depends on who's asking. If it's someone I know whom I haven't seen in awhile, and I'm somewhat relatively comfortable with them (friends, family, etc), I usually don't mind telling them I'm on disability, or telling them why. My reasons for that are sometimes political; I believe that there should be less stigma attached to disability and that people need to see the faces of others who are disabled to recognize that it's not as cut and dry as having mobility issues, or however the majority of people would define disability. That's not to say that I would trust this information to all people I have made acquaintances with.
For the rest of them, I just say I'm a writer. It's not a lie; I write. I write for a website. I write novels, poetry, children's stories. I am being published in an anthology. It's not how I make my living, strictly, but it's something that if they felt like they needed to ask 'So what do you write?' - because EVERY SINGLE PERSON who I say 'I'm a writer' to follows up with that EXACT question - I could answer with clarity and confidence. I've had people have the nerve to ask what kind of money is in it for me, and if I have a 'regular' job. I say it pays me enough to get by and I'm freelance so I can basically do whatever I want and go with what interests me. They leave it alone after that.
My advice: if you feel the need to say anything at all (because I really don't see anything wrong with saying 'I prefer not to discuss it' if you really prefer not to discuss it), pick something like that. Something in your life that you do that you would feel comfortable answering questions about, and be as vague as you want. I'm not sure why the hell people find it so important to ask personal questions all the time, and then form judgements about the information they receive. But that's just the society we live in I guess. If you try this, let me know how it works for you. Good luck.