Built on top of David's solution:
I added functionality for the UP key, as well added functionality for the ESC key in order to hide the popup window.
In addition to that, you can specify a callback function when constructing a AutoSuggestor object, which will be called when a suggestion from the list is selected.
import javax.swing.border.LineBorder
import java.util.ArrayList
import javax.swing.event.DocumentListener
import java.awt.*
import java.awt.event.*
import javax.swing.*
import javax.swing.event.DocumentEvent
/**
 * Author of the original version: David @ https://stackoverflow.com/users/1133011/david-kroukamp
 */
class Test {
    init {
        val frame = JFrame()
        frame.defaultCloseOperation = JFrame.EXIT_ON_CLOSE
        val f = JTextField(10)
        val autoSuggestor = object : AutoSuggestor(f, frame, ArrayList(), Color.WHITE.brighter(), Color.BLUE, Color.RED, 0.75f) {
            override fun wordTyped(typedWord: String?): Boolean {
                //create list for dictionary this in your case might be done via calling a method which queries db and returns results as arraylist
                val words = ArrayList<String>()
                words.add("hello")
                words.add("heritage")
                words.add("happiness")
                words.add("goodbye")
                words.add("cruel")
                words.add("car")
                words.add("war")
                words.add("will")
                words.add("world")
                words.add("wall")
                setDictionary(words)
                //addToDictionary("bye");//adds a single word
                return super.wordTyped(typedWord)//now call super to check for any matches against newest dictionary
            }
        }
        val p = JPanel()
        p.add(f)
        frame.add(p)
        frame.pack()
        frame.isVisible = true
    }
    companion object {
        @JvmStatic
        fun main(args: Array<String>) {
            SwingUtilities.invokeLater { Test() }
        }
    }
}
internal open class AutoSuggestor(val textField: JTextField, val container: Window, words: ArrayList<String>, popUpBackground: Color, private val suggestionsTextColor: Color, private val suggestionFocusedColor: Color, opacity: Float, private val callback: (String) -> Unit = {}) {
    private val suggestionsPanel: JPanel
    val autoSuggestionPopUpWindow: JWindow
    private var typedWord: String? = null
    private val dictionary = ArrayList<String>()
    private var currentIndexOfSpace: Int = 0
    private var tW: Int = 0
    private var tH: Int = 0
    private val documentListener = object : DocumentListener {
        override fun insertUpdate(de: DocumentEvent) {
            checkForAndShowSuggestions()
        }
        override fun removeUpdate(de: DocumentEvent) {
            checkForAndShowSuggestions()
        }
        override fun changedUpdate(de: DocumentEvent) {
            checkForAndShowSuggestions()
        }
    }
    val addedSuggestionLabels: ArrayList<SuggestionLabel>
        get() {
            val sls = ArrayList<SuggestionLabel>()
            for (i in 0 until suggestionsPanel.componentCount) {
                if (suggestionsPanel.getComponent(i) is SuggestionLabel) {
                    val sl = suggestionsPanel.getComponent(i) as SuggestionLabel
                    sls.add(sl)
                }
            }
            return sls
        }
    //get newest word after last white space if any or the first word if no white spaces
    val currentlyTypedWord: String
        get() {
            val text = textField.text
            var wordBeingTyped = ""
            if (text.contains(" ")) {
                val tmp = text.lastIndexOf(" ")
                if (tmp >= currentIndexOfSpace) {
                    currentIndexOfSpace = tmp
                    wordBeingTyped = text.substring(text.lastIndexOf(" "))
                }
            } else {
                wordBeingTyped = text
            }
            return wordBeingTyped.trim { it <= ' ' }
        }
    init {
        this.textField.document.addDocumentListener(documentListener)
        setDictionary(words)
        typedWord = ""
        currentIndexOfSpace = 0
        tW = 0
        tH = 0
        autoSuggestionPopUpWindow = JWindow(container)
        autoSuggestionPopUpWindow.opacity = opacity
        suggestionsPanel = JPanel()
        suggestionsPanel.layout = GridLayout(0, 1)
        suggestionsPanel.background = popUpBackground
        addFocusListenersToHandleVisibilityOfPopUpWindow()
        addKeyBindingToRequestFocusInPopUpWindow()
    }
    private fun addFocusListenersToHandleVisibilityOfPopUpWindow() {
        textField.addFocusListener(object:FocusListener {
            override fun focusLost(e: FocusEvent?) {
                var focusOnPopUp = false
                for (i in 0 until suggestionsPanel.componentCount) {
                    if (suggestionsPanel.getComponent(i) is SuggestionLabel) {
                        val label = suggestionsPanel.getComponent(i) as SuggestionLabel
                        if (label.isFocused)
                            focusOnPopUp = true
                    }
                }
                if (!focusOnPopUp && !shouldShowPopUpWindow) {
                    autoSuggestionPopUpWindow.isVisible = false
                }
            }
            override fun focusGained(e: FocusEvent?) {
                shouldShowPopUpWindow = false
            }
        })
    }
    private fun addKeyBindingToRequestFocusInPopUpWindow() {
        textField.getInputMap(JComponent.WHEN_FOCUSED).put(KeyStroke.getKeyStroke(KeyEvent.VK_ESCAPE, 0, true), "Escape released")
        textField.actionMap.put("Escape released", object : AbstractAction() {
            override fun actionPerformed(ae: ActionEvent) {// Hide the popwindow
                shouldShowPopUpWindow = false
                autoSuggestionPopUpWindow.isVisible = false
            }
        })
        textField.getInputMap(JComponent.WHEN_FOCUSED).put(KeyStroke.getKeyStroke(KeyEvent.VK_DOWN, 0, true), "Down released")
        textField.actionMap.put("Down released", object : AbstractAction() {
            override fun actionPerformed(ae: ActionEvent) {//focuses the first label on popwindow
                for (i in 0 until suggestionsPanel.componentCount) {
                    if (suggestionsPanel.getComponent(i) is SuggestionLabel) {
                        (suggestionsPanel.getComponent(i) as SuggestionLabel).isFocused = true
                        autoSuggestionPopUpWindow.toFront()
                        autoSuggestionPopUpWindow.requestFocusInWindow()
                        suggestionsPanel.requestFocusInWindow()
                        suggestionsPanel.getComponent(i).requestFocusInWindow()
                        break
                    }
                }
            }
        })
        textField.getInputMap(JComponent.WHEN_FOCUSED).put(KeyStroke.getKeyStroke(KeyEvent.VK_UP, 0, true), "Up released")
        textField.actionMap.put("Up released", object : AbstractAction() {
            override fun actionPerformed(ae: ActionEvent) {//focuses the last label on popwindow
                for (i in 0 until suggestionsPanel.componentCount) {
                    val reverseIndex = suggestionsPanel.componentCount-1 - i
                    if (suggestionsPanel.getComponent(reverseIndex) is SuggestionLabel) {
                        (suggestionsPanel.getComponent(reverseIndex) as SuggestionLabel).isFocused = true
                        autoSuggestionPopUpWindow.toFront()
                        autoSuggestionPopUpWindow.requestFocusInWindow()
                        suggestionsPanel.requestFocusInWindow()
                        suggestionsPanel.getComponent(reverseIndex).requestFocusInWindow()
                        break
                    }
                }
            }
        })
        suggestionsPanel.getInputMap(JComponent.WHEN_FOCUSED).put(KeyStroke.getKeyStroke(KeyEvent.VK_ESCAPE, 0, true), "Escape released")
        suggestionsPanel.actionMap.put("Escape released", object : AbstractAction() {
            override fun actionPerformed(ae: ActionEvent) {// Hide the popwindow
                shouldShowPopUpWindow = false
                autoSuggestionPopUpWindow.isVisible = false
            }
        })
        suggestionsPanel.getInputMap(JComponent.WHEN_ANCESTOR_OF_FOCUSED_COMPONENT).put(KeyStroke.getKeyStroke(KeyEvent.VK_UP, 0, true), "Up released")
        suggestionsPanel.actionMap.put("Up released", object : AbstractAction() {
            override fun actionPerformed(ae: ActionEvent) {//allows scrolling of labels in pop window (I know very hacky for now :))
                val sls = addedSuggestionLabels
                val max = sls.size
                var indexOfFocusedSuggestion = -1
                for (i in 0 until max) {
                    val sl = sls[i]
                    if ( sl.isFocused )
                        indexOfFocusedSuggestion = i
                }
                if (indexOfFocusedSuggestion - 1 < 0) {
                    sls[indexOfFocusedSuggestion].isFocused = false
                    autoSuggestionPopUpWindow.isVisible = false
                    setFocusToTextField()
                    checkForAndShowSuggestions()//fire method as if document listener change occured and fired it
                }
                else {
                    sls[indexOfFocusedSuggestion].isFocused = false
                    sls[indexOfFocusedSuggestion-1].isFocused = true
                    autoSuggestionPopUpWindow.toFront()
                    autoSuggestionPopUpWindow.requestFocusInWindow()
                    suggestionsPanel.requestFocusInWindow()
                    suggestionsPanel.getComponent(indexOfFocusedSuggestion-1).requestFocusInWindow()
                }
            }
        })
        suggestionsPanel.getInputMap(JComponent.WHEN_ANCESTOR_OF_FOCUSED_COMPONENT).put(KeyStroke.getKeyStroke(KeyEvent.VK_DOWN, 0, true), "Down released")
        suggestionsPanel.actionMap.put("Down released", object : AbstractAction() {
            override fun actionPerformed(ae: ActionEvent) {//allows scrolling of labels in pop window (I know very hacky for now :))
                val sls = addedSuggestionLabels
                val max = sls.size
                var indexOfFocusedSuggestion = -1
                for (i in 0 until max) {
                    val sl = sls[i]
                    if ( sl.isFocused )
                        indexOfFocusedSuggestion = i
                }
                if (indexOfFocusedSuggestion + 1 >= max) {
                    sls[indexOfFocusedSuggestion].isFocused = false
                    autoSuggestionPopUpWindow.isVisible = false
                    setFocusToTextField()
                    checkForAndShowSuggestions()//fire method as if document listener change occured and fired it
                }
                else {
                    sls[indexOfFocusedSuggestion].isFocused = false
                    sls[indexOfFocusedSuggestion+1].isFocused = true
                    autoSuggestionPopUpWindow.toFront()
                    autoSuggestionPopUpWindow.requestFocusInWindow()
                    suggestionsPanel.requestFocusInWindow()
                    suggestionsPanel.getComponent(indexOfFocusedSuggestion+1).requestFocusInWindow()
                }
            }
        })
    }
    private fun setFocusToTextField() {
        container.toFront()
        container.requestFocusInWindow()
        textField.requestFocusInWindow()
    }
    var shouldShowPopUpWindow = false
    private fun checkForAndShowSuggestions() {
        typedWord = currentlyTypedWord
        suggestionsPanel.removeAll()//remove previos words/jlabels that were added
        //used to calcualte size of JWindow as new Jlabels are added
        tW = 0
        tH = 0
        val added = wordTyped(typedWord)
        if (!added) {
            if (autoSuggestionPopUpWindow.isVisible) {
                autoSuggestionPopUpWindow.isVisible = false
            }
        } else {
            shouldShowPopUpWindow = true
            showPopUpWindow()
            setFocusToTextField()
        }
    }
    protected fun addWordToSuggestions(word: String) {
        val suggestionLabel = SuggestionLabel(word, suggestionFocusedColor, suggestionsTextColor, this, callback)
        calculatePopUpWindowSize(suggestionLabel)
        suggestionsPanel.add(suggestionLabel)
    }
    private fun calculatePopUpWindowSize(label: JLabel) {
        //so we can size the JWindow correctly
        if (tW < label.preferredSize.width) {
            tW = label.preferredSize.width
        }
        tH += label.preferredSize.height
    }
    private fun showPopUpWindow() {
        autoSuggestionPopUpWindow.contentPane.add(suggestionsPanel)
        autoSuggestionPopUpWindow.minimumSize = Dimension(textField.width, 30)
        autoSuggestionPopUpWindow.setSize(tW, tH)
        autoSuggestionPopUpWindow.isVisible = true
        var windowX = 0
        var windowY = 0
        windowX = container.getX() + textField.x + 5
        if (suggestionsPanel.height > autoSuggestionPopUpWindow.minimumSize.height) {
            windowY = container.getY() + textField.y + textField.height + autoSuggestionPopUpWindow.minimumSize.height
        } else {
            windowY = container.getY() + textField.y + textField.height + autoSuggestionPopUpWindow.height
        }
        autoSuggestionPopUpWindow.setLocation(windowX, windowY)
        autoSuggestionPopUpWindow.minimumSize = Dimension(textField.width, 30)
        autoSuggestionPopUpWindow.revalidate()
        autoSuggestionPopUpWindow.repaint()
    }
    fun setDictionary(words: ArrayList<String>?) {
        dictionary.clear()
        if (words == null) {
            return //so we can call constructor with null value for dictionary without exception thrown
        }
        for (word in words) {
            dictionary.add(word)
        }
    }
    fun addToDictionary(word: String) {
        dictionary.add(word)
    }
    open fun wordTyped(typedWord: String?): Boolean {
        if (typedWord!!.isEmpty()) {
            return false
        }
        var suggestionAdded = false
        for (word in dictionary) {//get words in the dictionary which we added
            var fullyMatches = word.length >= typedWord.length
            for (i in 0 until typedWord.length) {//each string in the word
                if (word.length > i && !typedWord.toLowerCase().startsWith(word.toLowerCase()[i].toString(), i)) {//check for match
                    fullyMatches = false
                    break
                }
            }
            if (fullyMatches) {
                addWordToSuggestions(word)
                suggestionAdded = true
            }
        }
        return suggestionAdded
    }
}
internal class SuggestionLabel(string: String, private val suggestionBorderColor: Color, private val suggestionsTextColor: Color, private val autoSuggestor: AutoSuggestor, private val callback: (String) -> Unit) : JLabel(string) {
    var isFocused = false
        set(focused) {
            if (focused) {
                border = LineBorder(suggestionBorderColor)
            } else {
                border = null
            }
            repaint()
            field = focused
        }
    private val autoSuggestionsPopUpWindow: JWindow
    private val textField: JTextField
    init {
        this.textField = autoSuggestor.textField
        this.autoSuggestionsPopUpWindow = autoSuggestor.autoSuggestionPopUpWindow
        initComponent()
    }
    private fun initComponent() {
        isFocusable = true
        foreground = suggestionsTextColor
        addMouseListener(object : MouseAdapter() {
            override fun mouseClicked(me: MouseEvent) {
                super.mouseClicked(me)
                replaceWithSuggestedText()
                autoSuggestionsPopUpWindow.isVisible = false
            }
        })
        getInputMap(JComponent.WHEN_FOCUSED).put(KeyStroke.getKeyStroke(KeyEvent.VK_ENTER, 0, true), "Enter released")
        actionMap.put("Enter released", object : AbstractAction() {
            override fun actionPerformed(ae: ActionEvent) {
                replaceWithSuggestedText()
                autoSuggestionsPopUpWindow.isVisible = false
            }
        })
        getInputMap(JComponent.WHEN_FOCUSED).put(KeyStroke.getKeyStroke(KeyEvent.VK_ESCAPE, 0, true), "Escape released")
        actionMap.put("Escape released", object : AbstractAction() {
            override fun actionPerformed(ae: ActionEvent) {// Hide the popwindow
                autoSuggestionsPopUpWindow.isVisible = false
            }
        })
    }
    private fun replaceWithSuggestedText() {
        val suggestedWord = text
        val text = textField.text
        val typedWord = autoSuggestor.currentlyTypedWord
        val t = text.substring(0, text.lastIndexOf(typedWord))
        val tmp = t + text.substring(text.lastIndexOf(typedWord)).replace(typedWord, suggestedWord)
        textField.text = tmp
        callback(tmp)
    }
}
Note: The above is written in Kotlin, but if you really want Java code, you can easily convert it back to Java.