You can always still work (job, contract, consulting, etc) even if you're "soft retired." It's just that you have a lot more freedom in the selection, and you can pursue things that carry more personal fulfillment than MegaCorp job with lots of responsibilities.

As for living frugally: Don't live _in_ SF. For a short BART or Caltrain ride, you can live in a $1500/mo. apartment that is beautiful.