It should take place in the future
The past might offer some fascinating settings such as the "First Contact War" between humans and Turians, but thanks to the encyclopedic lore already found in the first three games, there's a good chance that we'll already know how any past events will work out. (So much for "better" endings.) Go too far back, and BioWare runs the risk of pushing too many of the races we've come to love out of the picture, and events too close to the buildup of Shepard's adventure will rob the series of some of its wonder.
The future, however, is bursting with questions. Consider, for instance, the potential in a storyline that centers on Earth's attempt to get back on its feet in the wake of the destruction of the mass relays. On the one hand we have the Krogan hanging about, now cured of the genophage but exiled light years away from their homeworld. So, too, do we have numerous other species stuck in the general area as a result of Mass Effect 3's final battle, and part of the plot could follow their struggles to carve out worlds of their own in surrounding space.
And then, of course, the drive to rebuild and reactivate the mass relays could build up to a new, memorable climax for the series. Of course, placing the next Mass Effect game presents is own problems. Of necessity, BioWare will have to choose a "canon" ending to the preceding trilogy, thus running the risk of reigniting the controversies over Mass Effect 3's ending and its ultimate meaning.